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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



SCHEDULE 13E-3

AMENDMENT NO. 1

RULE 13e-3 TRANSACTION STATEMENT
UNDER SECTION 13(e) OF
THE SECURITIES EXCHANGE ACT OF 1934



iKang Healthcare Group, Inc.
(Name of the Issuer)



iKang Healthcare Group, Inc.
IK Healthcare Holdings Limited
IK Healthcare Investment Limited
IK Healthcare Merger Limited
Yunfeng Fund III, L.P.
Yunfeng Fund III Parallel Fund, L.P.
Taobao China Holding Limited
Boyu Capital Fund III, L.P.
Lee Ligang Zhang
ShanghaiMed, Inc.
Time Intelligent Finance Limited
Boquan He
Top Fortune Win Ltd.

(Names of Persons Filing Statement)

Class A Common Shares, par value US$0.01 per share

American Depositary Shares, each representing 1/2 Class A Common Shares
(Title of Class of Securities)
45174L108†
(CUSIP Number)

iKang Healthcare Group, Inc.
B-6F, Shimao Tower
92A Jianguo Road,
Chaoyang District, Beijing, 100022,
People's Republic of China
Tel: +86 10 5320 6688
  IK Healthcare Holdings Limited
IK Healthcare Investment Limited
IK Healthcare Merger Limited
Suite 3206, One Exchange Square,
8 Connaught Place, Central, Hong Kong
Tel: + 852 2516 6363

Yunfeng Fund III, L.P.
Yunfeng Fund III Parallel Fund, L.P.
Suite 3206, One Exchange Square,
8 Connaught Place, Central, Hong Kong
Tel: + 852 2516 6363

 

Taobao China Holding Limited
26/F, Tower One, Times Square,
1 Matheson Street, Causeway Bay,
Hong Kong
Tel: +852 2215 5100

Lee Ligang Zhang
ShanghaiMed, Inc.
Time Intelligent Finance Limited
c/o iKang Healthcare Group, Inc.
B-6F, Shimao Tower
92A Jianguo Road,
Chaoyang District, Beijing, 100022,
People's Republic of China
Tel: +86 10 5320 6688

 

Boquan He
Top Fortune Win Ltd.
Unit 3213, Metro Plaza
No. 183-187 Tianhe Road (N), Guangzhou,
People's Republic of China
Tel: +86 20 8755 3248

Boyu Capital Fund III, L.P.
Ugland House, 121 South Church Street,
Grand Cayman, KY1-1104, Cayman Islands
Tel: +1 345 949 8066

 

 

             (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)



With copies to:

Kathryn King Sudol, Esq.
Simpson Thacher & Bartlett
35th Floor, ICBC Tower
3 Garden Road, Central
Hong Kong
Telephone +852 2514 7600

 

Howard Zhang, Esq.
Li He, Esq.
Davis Polk & Wardwell LLP
2201, China World Office 2
No. 1, Jian Guo Men Wai Avenue
Beijing 100004, People's Republic of China
Telephone: +86 10 8567 5000

 

Weiheng Chen, Esq.
Jie Zhu, Esq.
Wilson Sonsini Goodrich & Rosati
Suite 1509, Jardine House
1 Connaught Place, Central
Hong Kong
Telephone: +852 3972 4955



This statement is filed in connection with (check the appropriate box):

o   The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14-C or Rule 13e-3(c) under the Securities Exchange Act of 1934.

o

 

The filing of a registration statement under the Securities Act of 1933.

o

 

A tender offer

ý

 

None of the above

Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies:    o

Check the following box if the filing is a final amendment reporting the results of the transaction:    o

Calculation of Filing Fee

 
Transactional Valuation*
  Amount of Filing Fee**
 
$1,101,119,073.04   $137,089.32
 
*
Calculated solely for the purpose of determining the filing fee in accordance with Rule 0-11(b)(1) under the Securities Exchange Act of 1934, as amended. The filing fee is calculated based on the sum of (a) the aggregate cash payment for the proposed per share cash payment of US$41.20 for the 25,798,867 issued and outstanding Class A common shares of the issuer subject to the transaction plus (b) the product of 1,258,424 Class A common shares underlying outstanding and unexercised options multiplied by US$30.36 per share (which is the difference between the US$41.20 per share merger consideration and the weighted average exercise price of US$10.84 per share for the options) ((a) and (b) together, the "Transaction Valuation").

**
The amount of the filing fee, calculated in accordance with Exchange Act Rule 0-11(b)(1) and the Securities and Exchange Commission Fee Rate Advisory #1 for Fiscal Year 2018, was calculated by multiplying the Transaction Valuation by 0.0001245.
o
Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting of the fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

This CUSIP applies to the American Depositary Shares, each representing 1/2 Class A common shares.


Table of Contents


TABLE OF CONTENTS

 
   
  Page  

Item 1

 

Summary Term Sheet

    3  

Item 2

 

Subject Company Information

    3  

Item 3

 

Identity and Background of Filing Person

    3  

Item 4

 

Terms of the Transaction

    4  

Item 5

 

Past Contracts, Transactions, Negotiations and Agreements

    5  

Item 6

 

Purposes of the Transaction and Plans or Proposals

    6  

Item 7

 

Purposes, Alternatives, Reasons and Effects

    7  

Item 8

 

Fairness of the Transaction

    8  

Item 9

 

Reports, Opinions, Appraisals and Negotiations

    9  

Item 10

 

Source and Amount of Funds or Other Consideration

    10  

Item 11

 

Interest in Securities of the Subject Company

    10  

Item 12

 

The Solicitation or Recommendation

    11  

Item 13

 

Financial Statements

    11  

Item 14

 

Persons/Assets, Retained, Employed, Compensated or Used

    12  

Item 15

 

Additional Information

    12  

Item 16

 

Exhibits

    12  

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INTRODUCTION

        This Amendment No. 1 to the Rule 13e-3 transaction statement on Schedule 13E-3, together with the exhibits hereto (this "Transaction Statement"), is being filed with the Securities and Exchange Commission (the "SEC") pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), jointly by the following persons (each, a "Filing Person," and collectively, the "Filing Persons"): (a) iKang Healthcare Group, Inc., an exempted company with limited liability incorporated under the laws of the Cayman Islands (the "Company"), the issuer of the Class A common shares, par value US$0.01 per share (each, a "Class A Share" and collectively, the "Class A Shares"), and Class C common shares, par value US$0.01 per share (each, a "Class C Share" and collectively, the "Class C Shares"; and the Class C Shares together with the Class A Shares, the "Shares"), including the Class A Shares represented by the American depositary shares, each representing 1/2 of a Class A Share (the "ADSs"), that is subject to the transaction pursuant to Rule 13e-3 under the Exchange Act; (b) IK Healthcare Holdings Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands ("Holdco"); (c) IK Healthcare Investment Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands and a wholly-owned subsidiary of Holdco ("Parent"); (d) IK Healthcare Merger Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands and a wholly-owned subsidiary of Parent ("Merger Sub"); (e) Yunfeng Fund III, L.P., an exempted limited partnership established under the laws of the Cayman Islands ("YF Fund III"); (f) Yunfeng Fund III Parallel Fund, L.P., an exempted limited partnership established under the laws of the Cayman Islands ("YF Fund III Parallel" and together with YF Fund III, "YFC") (g) Taobao China Holding Limited, a company incorporated under the laws of Hong Kong ("Taobao China"); (h) Boyu Capital Fund III, L.P., an exempted limited partnership established under the laws of the Cayman Islands ("Boyu Fund III"); (i) Mr. Lee Ligang Zhang, the chairman of the board of directors and the chief executive officer of the Company ("Mr. Zhang"); (j) Time Intelligent Finance Limited, a company incorporated under the laws of the British Virgin Islands ("Time Intelligent"), which is beneficially owned by Mr. Zhang's family trust; (k) ShanghaiMed, Inc., a company incorporated under the laws of the British Virgin Islands ("ShanghaiMed"), which is wholly-owned by Time Intelligent; (l) Mr. Boquan He, the vice chairman of the board of directors of the Company ("Mr. He"); and (m) Top Fortune Win Ltd., a company incorporated under the laws of the British Virgin Islands ("Top Fortune") (together with Time Intelligent, ShanghaiMed and Mr. He. the "Rollover Shareholders"). Filing Persons (b) through (m) are collectively referred to herein as the "Buyer Group."

        On March 26, 2018, Parent, Merger Sub and the Company entered into an agreement and plan of merger (as amended on May 29, 2018, the "merger agreement") providing for the merger of Merger Sub with and into the Company (the "merger") in accordance with the Companies Law Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands (the "Cayman Islands Companies Law"), with the Company continuing as the surviving company (the "surviving company") and a wholly-owned subsidiary of Parent.

        Under the terms of the merger agreement, if the merger is completed, at the effective time of the merger, each of the Shares (including Shares represented by ADSs) issued and outstanding immediately prior to the effective time of the merger and each of the ADSs will be cancelled and cease to exist in exchange for the right to receive US$41.20 per share or US$20.60 per ADS, in each case, in cash, without interest and net of any applicable withholding taxes, except for (a) Shares held by Parent, the Company or any of their respective subsidiaries, (b) Shares issued to the depositary of the Company's ADS program and reserved for the exercise of the options granted under the Company's share incentive plans, (c) certain Shares (including Shares represented by ADSs) beneficially owned by the Rollover Shareholders (the "Rollover Shares") (Shares described under (a) through (c) above are collectively referred to herein as the "Excluded Shares"), and (d) Shares owned by holders who have validly exercised and not effectively withdrawn or lost their rights to dissent from the merger pursuant

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to Section 238 of the Cayman Islands Companies Law (the "Dissenting Shares"). The Excluded Shares and ADSs representing such Excluded Shares will be cancelled and cease to exist for no consideration. The Dissenting Shares will be cancelled and cease to exist and each holder thereof will be entitled to receive only the payment of the fair value of such Dissenting Shares in accordance with the Cayman Islands Companies Law.

        In addition, at the effective time of the merger, the Company will (a) terminate the Company's share incentive plans adopted in February and April 2013 and March 2014, respectively (the "Share Incentive Plans"), and all relevant award agreements entered into under the Share Incentive Plans, and (b) cancel all options to purchase Shares or ADSs (the "Company Options") under the Share Incentive Plans that are then outstanding and unexercised, whether or not vested or exercisable. As soon as practicable after the effective time of the merger, each holder of a Company Option that is cancelled at the effective time of the merger will have the right to receive an amount in cash equal to the product of (i) the excess, if any, of US$41.20 over the applicable per share exercise price of such Company Option and (ii) the number of Shares underlying such Company Option, except that Company Options to purchase 500,000 Class A Shares held by Mr. Zhang and Company Options to purchase 250,000 Class A Shares held by Ms. Feiyan Huang will be cancelled for no consideration.

        In order for the merger to be completed, the merger agreement, the plan of merger and the transactions contemplated by the merger agreement and the plan of merger, including the merger, must be authorized and approved by the affirmative vote of holders of Shares representing at least two-thirds of the voting rights of the Shares present and voting in person or by proxy as a single class at an extraordinary general meeting of shareholders in accordance with Section 233(6) of the Cayman Islands Companies Law.

        As of the date of this proxy statement, the Rollover Shareholders beneficially own 8,527,846 Class A Shares and 805,100 Class C Shares, including Class A Shares represented by ADSs, which represent approximately 26.6% of the total issued and outstanding Shares and approximately 44.4% of the total voting power of the outstanding Shares. Pursuant to the terms of the support agreement dated as of March 26, 2018 (as amended on May 29, 2018 and as may be further amended from time to time, the "Support Agreement"), by and among the Rollover Shareholders, Mr. Zhang, Parent and Holdco, each Rollover Shareholder will vote all Shares beneficially owned by such Rollover Shareholder in favor of the authorization and approval of the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, at the extraordinary general meeting of shareholders of the Company.

        The Company will make available to its shareholders a proxy statement (the "proxy statement," a preliminary copy of which is attached as Exhibit (a)-(1) to this Transaction Statement), relating to the extraordinary general meeting of shareholders of the Company, at which the shareholders of the Company will consider and vote upon, among other proposals, a proposal to authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger. A copy of the merger agreement is attached to the proxy statement as Annex A and is incorporated herein by reference. As of the date hereof, the proxy statement is in preliminary form and is subject to completion.

        Pursuant to General Instruction F to Schedule 13E-3, the information contained in the proxy statement, including all annexes thereto, is incorporated in its entirety herein by this reference, and the responses to each item in this Schedule 13E-3 are qualified in their entirety by the information contained in the proxy statement and the annexes thereto. Capitalized terms used but not defined in this Transaction Statement shall have the meanings given to them in the proxy statement.

        All information contained in this Transaction Statement concerning each Filing Person has been supplied by such Filing Person.

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Item 1    Summary Term Sheet

        The information set forth in the proxy statement under the following captions is incorporated herein by reference:

Item 2    Subject Company Information

(a)
Name and Address. The information set forth in the proxy statement under the following caption is incorporated herein by reference:

"Summary Term Sheet—The Parties Involved in the Merger"

(b)
Securities. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"The Extraordinary General Meeting—Record Date; Shares and ADSs Entitled to Vote"

"Security Ownership of Certain Beneficial Owners and Management of the Company"

(c)
Trading Market and Price. The information set forth in the proxy statement under the following caption is incorporated herein by reference:

"Market Price of the Company's ADSs, Dividends and Other Matters—Market Price of the ADSs"

(d)
Dividends. The information set forth in the proxy statement under the following caption is incorporated herein by reference:

"Market Price of the Company's ADSs, Dividends and Other Matters—Dividend Policy"

(e)
Prior Public Offering. The information set forth in the proxy statement under the following caption is incorporated herein by reference:

"Transactions in the Shares and ADSs—Prior Public Offerings"

(f)
Prior Stock Purchase. The information set forth in the proxy statement under the following caption is incorporated herein by reference:

"Transactions in the Shares and ADSs"

"Special Factors—Related Party Transactions"

Item 3    Identity and Background of Filing Person

(a)
Name and Address. iKang Healthcare Group, Inc. is the subject company. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—The Parties Involved in the Merger"

"Annex F—Directors and Executive Officers of Each Filing Person"

(b)
Business and Background of Entities. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—The Parties Involved in the Merger"

"Annex F—Directors and Executive Officers of Each Filing Person"

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(c)
Business and Background of Natural Persons. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—The Parties Involved in the Merger"

"Annex F—Directors and Executive Officers of Each Filing Person"

Item 4    Terms of the Transaction

(a)
(1)  Material Terms—Tender Offers. Not applicable.

(a)
(2)  Material Terms—Merger or Similar Transactions. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet"

"Questions and Answers about the Extraordinary General Meeting and the Merger"

"Special Factors—Background of the Merger"

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board"

"Special Factors—Purposes of and Reasons for the Merger"

"Special Factors—Interests of Certain Persons in the Merger"

"Special Factors—Accounting Treatment of the Merger"

"Special Factors—Material U.S. Federal Income Tax Consequences"

"The Extraordinary General Meeting"

"The Merger Agreement and Plan of Merger"

"Annex A—Agreement and Plan of Merger and Amendment No. 1 to the Agreement and Plan of Merger"

"Annex B—Plan of Merger"

(c)
Different Terms. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—Interests of the Company's Executive Officers and Directors in the Merger"

"Special Factors—Interests of Certain Persons in the Merger"

"The Extraordinary General Meeting—Proposals to be Considered at the Extraordinary General Meeting"

"The Merger Agreement and Plan of Merger"

"Annex A—Agreement and Plan of Merger and Amendment No. 1 to the Agreement and Plan of Merger"

"Annex B—Plan of Merger"

(d)
Dissenters' Rights. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—Dissenters' Rights of Shareholders and ADS Holders"

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(e)
Provisions for Unaffiliated Shareholders. The information set forth in the proxy statement under the following caption is incorporated herein by reference:

"Provisions for Unaffiliated Shareholders"

(f)
Eligibility of Listing or Trading. Not applicable.

Item 5    Past Contracts, Transactions, Negotiations and Agreements

(a)
Transactions. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Special Factors—Interests of Certain Persons in the Merger"

"Special Factors—Related Party Transactions"

"Transactions in the Shares and ADSs"

(b)
Significant Corporate Events. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Special Factors—Background of the Merger"

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board"

"Special Factors—Purposes of and Reasons for the Merger"

"Special Factors—Interests of Certain Persons in the Merger"

"Special Factors—Related Party Transactions"

"The Merger Agreement and Plan of Merger"

"Annex A—Agreement and Plan of Merger and Amendment No. 1 to the Agreement and Plan of Merger"

"Annex B—Plan of Merger"

(c)
Negotiations or Contacts. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Special Factors—Background of the Merger"

"Special Factors—Plans for the Company after the Merger"

"Special Factors—Interests of Certain Persons in the Merger"

"The Merger Agreement and Plan of Merger"

"Annex A—Agreement and Plan of Merger and Amendment No. 1 to the Agreement and Plan of Merger"

"Annex B—Plan of Merger"

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(e)
Agreements Involving the Subject Company's Securities. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—Support Agreement"

"Summary Term Sheet—Financing of the Merger"

"Special Factors—Background of the Merger"

"Special Factors—Plans for the Company after the Merger"

"Special Factors—Financing of the Merger"

"Special Factors—Interests of Certain Persons in the Merger"

"Special Factors—Related Party Transactions"

"Special Factors—Voting by the Buyer Group at the Shareholders¡¯ Meeting"

"The Merger Agreement and Plan of Merger"

"Transactions in the Shares and ADSs"

"Annex A—Agreement and Plan of Merger and Amendment No. 1 to the Agreement and Plan of Merger"

"Annex B—Plan of Merger"

Item 6    Purposes of the Transaction and Plans or Proposals

(b)
Use of Securities Acquired. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet"

"Questions and Answers about the Extraordinary General Meeting and the Merger"

"Special Factors—Purposes of and Reasons for the Merger"

"Special Factors—Effect of the Merger on the Company"

"The Merger Agreement and Plan of Merger"

"Annex A—Agreement and Plan of Merger and Amendment No. 1 to the Agreement and Plan of Merger"

"Annex B—Plan of Merger"

(c)
(1)-(8) Plans. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—The Merger"

"Summary Term Sheet—Purposes and Effects of the Merger"

"Summary Term Sheet—Plans for the Company after the Merger"

"Summary Term Sheet—Financing of the Merger"

"Summary Term Sheet—Interests of the Company's Executive Officers and Directors in the Merger"

"Special Factors—Background of the Merger"

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Item 7    Purposes, Alternatives, Reasons and Effects

(a)
Purposes. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—Purposes and Effects of the Merger"

"Summary Term Sheet—Plans for the Company after the Merger"

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board"

"Special Factors—Purposes of and Reasons for the Merger"

(b)
Alternatives. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Special Factors—Background of the Merger"

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board"

"Special Factors—Position of the Buyer Group as to the Fairness of the Merger"

"Special Factors—Purposes of and Reasons for the Merger"

"Special Factors—Alternatives to the Merger"

"Special Factors—Effects on the Company if the Merger is not Completed"

(c)
Reasons. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—Purposes and Effects of the Merger"

"Special Factors—Background of the Merger"

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board"

"Special Factors—Position of the Buyer Group as to the Fairness of the Merger"

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(d)
Effects. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—Purposes and Effects of the Merger"

"Special Factors—Background of the Merger"

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board"

"Special Factors—Effect of the Merger on the Company"

"Special Factors—Plans for the Company after the Merger"

"Special Factors—Effects on the Company if the Merger is not Completed"

"Special Factors—Effect of the Merger on the Company—The Company's Net Book Value and Net Earnings"

"Special Factors—Interests of Certain Persons in the Merger"

"Special Factors—Material PRC Income Tax Consequences"

"Special Factors—Material Cayman Islands Tax Consequences"

"Special Factors—Material U.S. Federal Income Tax Consequences"

"The Merger Agreement and Plan of Merger"

"Annex A—Agreement and Plan of Merger and Amendment No. 1 to the Agreement and Plan of Merger"

"Annex B—Plan of Merger"

Item 8    Fairness of the Transaction

(a)
-(b)  Fairness; Factors Considered in Determining Fairness. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—Recommendations of the Special Committee and the Board"

"Summary Term Sheet—Position of the Buyer Group as to the Fairness of the Merger"

"Summary Term Sheet—Opinion of the Special Committee's Financial Advisor"

"Summary Term Sheet—Interests of the Company's Executive Officers and Directors in the Merger"

"Special Factors—Background of the Merger"

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board"

"Special Factors—Position of the Buyer Group as to the Fairness of the Merger"

"Special Factors—Opinion of the Special Committee's Financial Advisor"

"Special Factors—Interests of Certain Persons in the Merger"

"Annex C—Opinion of J.P. Morgan Securities (Asia Pacific) Limited as Financial Advisor"

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(c)
Approval of Security Holders. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—Shareholder Vote Required to Approve the Merger Agreement and Plan of Merger"

"Questions and Answers about the Extraordinary General Meeting and the Merger"

"The Extraordinary General Meeting—Vote Required"

(d)
Unaffiliated Representative. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Special Factors—Background of the Merger"

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board"

"Special Factors—Opinion of the Special Committee's Financial Advisor"

"Annex C—Opinion of J.P. Morgan Securities (Asia Pacific) Limited as Financial Advisor"

(e)
Approval of Directors. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—Recommendations of the Special Committee and the Board"

"Questions and Answers about the Extraordinary General Meeting and the Merger"

"Special Factors—Background of the Merger"

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board"

(f)
Other Offers. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Special Factors—Background of the Merger"

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board"

Item 9    Reports, Opinions, Appraisals and Negotiations

(a)
Report, Opinion or Appraisal. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—Opinion of the Special Committee's Financial Advisor"

"Special Factors—Background of the Merger"

"Special Factors—Opinion of the Special Committee's Financial Advisor"

"Annex C—Opinion of J.P. Morgan Securities (Asia Pacific) Limited as Financial Advisor"

(b)
Preparer and Summary of the Report, Opinion or Appraisal. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Special Factors—Opinion of the Special Committee's Financial Advisor"

"Annex C—Opinion of J.P. Morgan Securities (Asia Pacific) Limited as Financial Advisor"

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(c)
Availability of Documents. The information set forth in the proxy statement under the following caption is incorporated herein by reference:

"Where You Can Find More Information"

        The reports, opinions or appraisals referenced in this Item 9 will be made available for inspection and copying at the principal executive offices of the Company during its regular business hours by any interested holder of the Shares or his, her or its representative who has been so designated in writing.

Item 10    Source and Amount of Funds or Other Consideration

(a)
Source of Funds. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—Financing of the Merger"

"Special Factors—Financing of the Merger"

"The Merger Agreement and Plan of Merger"

"Annex A—Agreement and Plan of Merger and Amendment No. 1 to the Agreement and Plan of Merger"

"Annex B—Plan of Merger"

(b)
Conditions. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—Financing of the Merger"

"Special Factors—Financing of the Merger"

(c)
Expenses. The information set forth in the proxy statement under the following caption is incorporated herein by reference:

"Special Factors—Fees and Expenses"

(d)
Borrowed Funds. The information set forth in the proxy statement under the following caption is incorporated herein by reference:

"Summary Term Sheet—Financing of the Merger"

"Special Factors—Financing of the Merger"

"The Merger Agreement and Plan of Merger—Financing"

Item 11    Interest in Securities of the Subject Company

(a)
Securities Ownership. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—Interests of the Company's Executive Officers and Directors in the Merger"

"Special Factors—Interests of Certain Persons in the Merger"

"Security Ownership of Certain Beneficial Owners and Management of the Company"

(b)
Securities Transaction. The information set forth in the proxy statement under the following caption is incorporated herein by reference:

"Transactions in the Shares and ADSs"

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Item 12    The Solicitation or Recommendation

(a)
Intent to Tender or Vote in a Going-Private Transaction. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—Interests of the Company's Executive Officers and Directors in the Merger"

"Summary Term Sheet—Support Agreement"

"Questions and Answers about the Extraordinary General Meeting and the Merger"

"Special Factors—Support Agreement"

"Special Factors—Voting by the Buyer Group at the Shareholders' Meeting"

"The Extraordinary General Meeting—Vote Required"

"Security Ownership of Certain Beneficial Owners and Management of the Company"

(b)
Recommendations of Others. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—Recommendations of the Special Committee and the Board"

"Summary Term Sheet—Position of the Buyer Group as to the Fairness of the Merger"

"Summary Term Sheet—Support Agreement"

"Summary Term Sheet—Interests of the Company's Executive Officers and Directors in the Merger"

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board"

"Special Factors—Position of the Buyer Group as to the Fairness of the Merger"

"Special Factors—Support Agreement"

"The Extraordinary General Meeting—The Board's Recommendation"

Item 13    Financial Statements

(a)
Financial Information. The audited consolidated financial statements of the Company for the fiscal years ended March 31, 2016 and 2017 are incorporated herein by reference to the Company's Form 20-F for the fiscal year ended March 31, 2017, filed on August 15, 2017 (see page F-1 and following pages). The unaudited consolidated financial statements of the Company for the nine-month periods ended December 31, 2016 and 2017 are incorporated herein by reference to the Company's 2017 fiscal third quarter earnings release furnished on Form 6-K on March 23, 2018.
(b)
Pro Forma Information. Not applicable.

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Item 14    Persons/Assets, Retained, Employed, Compensated or Used

(a)
Solicitation or Recommendations. The information set forth in the proxy statement under the following caption is incorporated herein by reference:

"The Extraordinary General Meeting—Solicitation of Proxies"

(b)
Employees and Corporate Assets. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

"Summary Term Sheet—The Parties Involved in the Merger"

"Special Factors—Interests of Certain Persons in the Merger"

"Annex F—Directors and Executive Officers of Each Filing Person"

Item 15    Additional Information

(c)
Other Material Information. The information contained in the proxy statement, including all annexes thereto, is incorporated herein by reference.

Item 16    Exhibits

(a)
-(1)      Preliminary Proxy Statement of the Company dated            , 2018.

(a)
-(2)      Notice of Extraordinary General Meeting of Shareholders of the Company, incorporated herein by reference to the proxy statement.

(a)
-(3)      Form of Proxy Card, incorporated herein by reference to Annex G to the proxy statement.

(a)
-(4)      Form of ADS Voting Instruction Card, incorporated herein by reference to Annex H to the proxy statement.

(a)
-(5)      Press Release issued by the Company, dated March 26, 2018, incorporated herein by reference to Exhibit 99.1 to the Report on Form 6-K furnished by the Company to the SEC on March 26, 2018.

(a)
-(6)      Press Release issued by the Company, dated May 29, 2018, incorporated herein by reference to Exhibit 99.2 to the Report on Form 6-K furnished by the Company to the SEC on May 29, 2018.

(b)
-(1)*    Amended and Restated Equity Commitment Letter, dated May 29, 2018, by and between Parent and YF Fund III.

(b)
-(2)*    Amended and Restated Equity Commitment Letter, dated May 29, 2018, by and between Parent and YF Fund III Parallel.

(b)
-(3)*    Amended and Restated Equity Commitment Letter, dated May 29, 2018, by and between Parent and Taobao China.

(b)
-(4)*    Equity Commitment Letter, dated May 29, 2018, by and between Parent and Boyu Fund III.

(c)
-(1)      Opinion of J.P. Morgan Securities (Asia Pacific) Limited as Financial Advisor, dated March 26, 2018, incorporated herein by reference to Annex C to the proxy statement.

(c)
-(2)*    Discussion Materials prepared by J.P. Morgan Securities (Asia Pacific) Limited for discussion with the special committee of the board of directors of the Company, dated March 26, 2018.

(d)
-(1)      Agreement and Plan of Merger, dated March 26, 2018, by and among the Company, Parent and Merger Sub, incorporated herein by reference to Annex A to the proxy statement.

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(d)
-(2)      Amendment No. 1 to the Agreement and Plan of Merger, dated May 29, 2018, by and among the Company, Parent and Merger Sub, incorporated herein by reference to Annex A to the proxy statement.

(d)
-(3)      Support Agreement, dated March 26, 2018, by and among the Rollover Shareholders, Mr. Zhang, Parent and Holdco, incorporated herein by reference to Annex E to the proxy statement.

(d)
-(4)      Amendment No. 1 to the Support Agreement, dated May 29, 2018, by and among the Rollover Shareholders, Mr. Zhang, Parent and Holdco, incorporated herein by reference to Annex E to the proxy statement.

(d)
-(5)*    Amended and Restated Limited Guarantee, dated May 29, 2018, by ShanghaiMed in favor of the Company.

(d)
-(6)*    Amended and Restated Limited Guarantee, dated May 29, 2018, by YF Fund III in favor of the Company.

(d)
-(7)*    Amended and Restated Limited Guarantee, dated May 29, 2018, by YF Fund III Parallel in favor of the Company.

(d)
-(8)*    Amended and Restated Limited Guarantee, dated May 29, 2018, by Taobao China in favor of the Company.

(d)
-(9)*    Amended and Restated Limited Guarantee, dated May 29, 2018, by Top Fortune in favor of the Company.

(d)
-(10)*  Limited Guarantee, dated May 29, 2018, by Boyu Fund III in favor of the Company.

(d)
-(11)*  Amended and Restated Interim Investors Agreement, dated May 29, 2018, by and among Holdco, Parent, Merger Sub, Rollover Shareholders, YF Fund III, YF Fund III Parallel, Boyu Fund III, Mr. Zhang and Taobao China.

(f)
-(1)       Dissenters' Rights, incorporated herein by reference to the section entitled "Dissenters' Rights" in the proxy statement.

(f)
-(2)       Section 238 of the Companies Law Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands, incorporated herein by reference to Annex D to the proxy statement.

(g)
Not applicable.

*
Previously filed on May 30, 2018.

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SIGNATURES

        After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

        Date: June 22, 2018

    iKang Healthcare Group, Inc.

 

 

By:

 

/s/ RUBY LU

        Name:   Ruby Lu
        Title:   Chairman, Special Committee of the
Board of Directors

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    IK Healthcare Holdings Limited

 

 

By:

 

/s/ HUANG XIN

        Name:   Huang Xin
        Title:   Director

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    IK Healthcare Investment Limited

 

 

By:

 

/s/ HUANG XIN

        Name:   Huang Xin
        Title:   Director

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    IK Healthcare Merger Limited

 

 

By:

 

/s/ HUANG XIN

        Name:   Huang Xin
        Title:   Director

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    Yunfeng Fund III, L.P.

 

 

By:

 

Yunfeng Investment III, Ltd., its general partner

 

 

By:

 

/s/ XIN HUANG

        Name:   Xin Huang
        Title:   Authorized Signatory

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    Yunfeng Fund III Parallel Fund, L.P.

 

 

By:

 

Yunfeng Investment III, Ltd., its general partner

 

 

By:

 

/s/ XIN HUANG

        Name:   Xin Huang
        Title:   Authorized Signatory

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    Taobao China Holding Limited

 

 

By:

 

/s/ WANG, LIANG

        Name: Wang, Liang
        Title: Authorized Signatory

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    Boyu Capital Fund III, L.P.

 

 

By:

 

Boyu Capital General Partner III, L.P., its general partner

 

 

By:

 

Boyu Capital General Partner III, Ltd., its general partner

 

 

By:

 

/s/ LEONG CHU YONG

        Name:   Leong Chu Yong
        Title:   Authorized Signatory

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    Lee Ligang Zhang

 

 

By:

 

/s/ LEE LIGANG ZHANG

        Name:   Lee Ligang Zhang

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    ShanghaiMed, Inc.

 

 

By:

 

/s/ LEE LIGANG ZHANG

        Name:   Lee Ligang Zhang
        Title:   Director

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    Time Intelligent Finance Limited

 

 

By:

 

/s/ LEE LIGANG ZHANG

        Name:   Lee Ligang Zhang
        Title:   Director

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    Boquan He

 

 

By:

 

/s/ BOQUAN HE

        Name:   Boquan He

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    Top Fortune Win Ltd.

 

 

By:

 

/s/ BOQUAN HE

        Name:   Boquan He
        Title:   Director



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Exhibit (a)-(1)

PROXY STATEMENT OF THE COMPANY

GRAPHIC


                , 2018

Shareholders of iKang Healthcare Group, Inc.
Re: Notice of Extraordinary General Meeting of Shareholders

Dear Shareholder:

        You are cordially invited to attend an extraordinary general meeting of shareholders of iKang Healthcare Group, Inc. (the "Company") to be held on          , 2018 at           (Beijing time). The meeting will be held at B-6F, Shimao Tower, 92A Jianguo Road, Chaoyang District, Beijing, the People's Republic of China. The attached notice of the extraordinary general meeting and proxy statement provide information regarding the matters to be considered and voted on at the extraordinary general meeting, including at any adjournment thereof.

        On March 26, 2018, the Company entered into an agreement and plan of merger (as amended on May 29, 2018, the "merger agreement") with IK Healthcare Investment Limited, an exempted company incorporated under the laws of the Cayman Islands ("Parent"), and IK Healthcare Merger Limited, an exempted company incorporated under the laws of the Cayman Islands and a wholly-owned subsidiary of Parent ("Merger Sub"), pursuant to which Merger Sub will be merged with and into the Company (the "merger") and cease to exist, with the Company continuing as the surviving company (the "surviving company") and becoming a wholly-owned subsidiary of Parent. At the extraordinary general meeting you will be asked to consider and vote upon a proposal to authorize and approve the merger agreement, the plan of merger required to be filed with the Registrar of Companies of the Cayman Islands in connection with the merger (the "plan of merger"), and the transactions contemplated by the merger agreement, including the merger. Copies of the merger agreement and the plan of merger are attached as Annex A and Annex B, respectively, to the accompanying proxy statement.

        Each of Parent and Merger Sub is formed solely for purposes of the merger. At the effective time of the merger, Parent will be wholly-owned by IK Healthcare Holdings Limited, an exempted company incorporated under the laws of the Cayman Islands ("Holdco"), and Holdco will be beneficially owned by Yunfeng Fund III, L.P. ("YF Fund III"), Yunfeng Fund III Parallel Fund, L.P. ("YF Fund III Parallel," together with YF Fund III, "YFC"), Taobao China Holding Limited ("Taobao China"), Boyu Capital Fund III, L.P. ("Boyu Fund III", together with YFC and Taobao China, the "Sponsors"), Mr. Lee Ligang Zhang, the chairman of the board of directors (the "Board") and the chief executive officer of the Company ("Mr. Zhang"), Time Intelligent Finance Limited, a company incorporated under the laws of the British Virgin Islands and beneficially owned by Mr. Zhang's family trust ("Time Intelligent"); ShanghaiMed, Inc., a company incorporated under the laws of the British Virgin Islands and a wholly-owned subsidiary of Time Intelligent ("ShanghaiMed"), Mr. Boquan He, the vice chairman of the Board ("Mr. He"); and Top Fortune Win Ltd., a company incorporated under the laws of the British Virgin Islands ("Top Fortune," and together with Time Intelligent, ShanghaiMed and Mr. He., the "Rollover Shareholders"). Holdco, Parent, Merger Sub, the Sponsors, Mr. Zhang and the Rollover Shareholders are collectively referred to as the "Buyer Group."

        As of the date of this proxy statement, the Rollover Shareholders collectively beneficially own 8,527,846 Class A common shares, par value US$0.01 per share (each, a "Class A Share"), and 805,100 Class C common shares, par value US$0.01 per share (each, a "Class C Share"; and the Class C Shares

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together with the Class A Shares, the "Shares"), including Class A Shares represented by the American depositary shares, each representing 1/2 of a Class A Share (the "ADSs"), which represent approximately 26.6% of the total issued and outstanding Shares and approximately 44.4% of the total voting power of the outstanding Shares. If the merger is completed, the Company will continue its operations as a privately held company and will be beneficially owned by the Rollover Shareholders and the Sponsors and, as a result of the merger, the ADSs will no longer be listed on the NASDAQ Global Select Market and the ADS program for the ADSs will terminate.

        If the merger is completed, at the effective time of the merger, each Share (including Shares represented by ADSs) issued and outstanding immediately prior to the effective time of the merger will be cancelled and cease to exist in exchange for the right to receive US$41.20 per share or US$20.60 per ADS, in each case, in cash, without interest and net of any applicable withholding taxes, except for (a) Shares held by Parent, the Company or any of their respective subsidiaries, (b) Shares issued to the depositary of the Company's ADS program and reserved for the exercise of the options granted under the Company's share incentive plans, (c) certain Shares (including Shares represented by ADSs) beneficially owned by the Rollover Shareholders (the "Rollover Shares") (Shares described under (a) through (c) above are collectively referred to herein as the "Excluded Shares"), and (d) Shares owned by holders who have validly exercised and not effectively withdrawn or lost their rights to dissent from the merger pursuant to Section 238 of the Cayman Islands Companies Law (the "Dissenting Shares"). The Excluded Shares and ADSs representing such Excluded Shares will be cancelled and cease to exist for no consideration. The Dissenting Shares will be cancelled and cease to exist and each holder thereof will be entitled to receive only the payment of the fair value of such Dissenting Shares in accordance with the Cayman Islands Companies Law.

        In addition, at the effective time of the merger, the Company will (a) terminate the Company's share incentive plans adopted in February and April 2013 and March 2014, respectively (the "Share Incentive Plans"), and all relevant award agreements entered into under the Share Incentive Plans, and (b) cancel all options to purchase Shares or ADSs (the "Company Options") under the Share Incentive Plans that are then outstanding and unexercised, whether or not vested or exercisable. As soon as practicable after the effective time of the merger, each holder of a Company Option that is cancelled at the effective time of the merger will have the right to receive an amount in cash equal to the product of (i) the excess, if any, of US$41.20 over the applicable per share exercise price of such Company Option and (ii) the number of Shares underlying such Company Option, except that Company Options to purchase 500,000 Class A Shares held by Mr. Zhang and Company Options to purchase 250,000 Class A Shares held by Ms. Feiyan Huang will be cancelled for no consideration.

        The Buyer Group intends to fund the merger consideration through a combination of (i) equity financing in an aggregate amount of approximately US$1.15 billion provided by the Sponsors pursuant to equity commitment letters issued by the Sponsors, and (ii) rollover financing comprised of Rollover Shares. In calculating this amount, the Company and the Buyer Group did not consider the value of the Excluded Shares, which will be cancelled for no consideration pursuant to the merger agreement.

        The special committee of the Board, composed solely of directors unrelated to the management of the Company or the Buyer Group (the "Special Committee"), reviewed and considered the terms and conditions of the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger. On March 26, 2018, the Special Committee unanimously (a) determined that the merger agreement and the plan of merger are fair to and in the best interests of the Company and its shareholders, including its shareholders which do not hold Excluded Shares and, to the Company's knowledge, are unaffiliated with the Buyer Group (the "unaffiliated shareholders"), (b) declared it advisable to enter into the merger agreement, the plan of merger and other documents relating to the merger, (c) recommended that the Board approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, and (d) recommended that the Board submit the merger agreement, the plan of merger

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and the transactions contemplated by the merger agreement, including the merger, to the shareholders of the Company for approval and authorization at an extraordinary general meeting of the shareholders of the Company, with the recommendation of the Board that the shareholders of the Company authorize and approve by way of a special resolution the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger.

        On March 26, 2018, the Board, after carefully considering all relevant factors, including the determination and recommendation of the Special Committee, (a) determined that it was advisable, fair to and in the best interests of the Company and the shareholders of the Company, including the unaffiliated shareholders, to enter into the merger agreement and the transactions contemplated by the merger agreement, (b) authorized and approved the execution, delivery and performance of the merger agreement, the plan of merger and the transaction agreements contemplated by the merger agreement and the consummation of the contemplated transactions, including the merger, and (c) resolved to direct that the authorization and approval of the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, be submitted to a vote at an extraordinary general meeting of the shareholders with the recommendation of the Board that the shareholders of the Company authorize and approve by way of special resolution the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger.

        After careful consideration and upon the unanimous recommendation of the Special Committee composed solely of directors unrelated to any member of the management of the Company or any member of the Buyer Group, the Board authorized and approved the merger agreement and recommends that you vote (1) FOR the proposal to authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement and the plan of merger, including (a) the merger, (b) upon the merger becoming effective, the variation of the authorized share capital of the Company at the effective time of the merger from US$600,000 divided into 58,000,000 Class A common shares of a par value of US$0.01 each and 2,000,000 Class C common shares of a par value of US$0.01 each to US$50,000 divided into 50,000 of US$1.00 each, and (c) upon the merger becoming effective, the amendment and restatement of the memorandum and articles of association of the Company (as the surviving company) in the form attached to the plan of merger, (2) FOR the proposal to authorize each director and officer of the Company to do all things necessary to give effect to merger agreement, the plan of merger, and the transactions contemplated by the merger agreement and the plan of merger, including the merger and (3) FOR the proposal to adjourn the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting.

        The accompanying proxy statement provides detailed information about the merger and the extraordinary general meeting. We encourage you to read the entire document and all of the attachments and other documents referred to or incorporated by reference therein carefully. You may also obtain more information about the Company from documents the Company has filed with the United States Securities and Exchange Commission (the "SEC"), which are available for free at the SEC's website www.sec.gov.

        Regardless of the number of Shares you own, your vote is very important. In order for the merger to be completed, the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, must be authorized and approved by a special resolution (as defined in the Cayman Islands Companies Law) of the Company's shareholders, which requires the affirmative vote of shareholders representing at least two-thirds of voting rights of the Shares present and voting in person or by proxy as a single class at the extraordinary general meeting. In considering the recommendation of the Special Committee and the Board, you should be aware that some of the Company's directors or executive officers have interests in the merger that are different from, or in

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addition to, the interests of the shareholders generally. As of the date of this proxy statement, the Buyer Group beneficially owns approximately 26.6% of the Company's issued and outstanding Shares and 44.4% of the total number of votes represented by the Company's issued and outstanding Shares. Whether or not you plan to attend the extraordinary general meeting, please complete the enclosed proxy card, in accordance with the instructions set forth on your proxy card, as promptly as possible. The deadline to lodge your proxy card is                , 2018 at                 a.m. (Beijing time). Each shareholder has one vote for each Class A Share or fifteen votes for each Class C Share held as of the close of business in the Cayman Islands on                 , 2018.

        Voting at the extraordinary general meeting will take place by poll voting, as the chairman of the Board has undertaken to demand poll voting at the meeting.

        As the registered holder of the Shares represented by ADSs, JPMorgan Chase Bank, N.A., (the "ADS depositary") will endeavor to vote (or will endeavor to cause the vote of) the Shares it holds on deposit at the extraordinary general meeting in accordance with the voting instructions, the form of which is attached as Annex H to the accompanying proxy statement, timely received from holders of ADSs at the close of business in New York City on                , 2018, the ADS record date. The ADS depositary must receive such instructions no later than                 a.m. (New York City Time) on                , 2018. The ADS depositary has advised us that, pursuant to Section 12 of the American depositary receipt evidencing your ADSs, the form of which was attached to the deposit agreement, dated as of April 8, 2014, by and among the Company, the ADS depositary and all holders and beneficial owners from time to time of ADSs issued thereunder, as may be amended from time to time (the "Deposit Agreement"), it will not itself exercise any voting discretion in respect of any Shares represented by ADSs other than in accordance with signed voting instructions from the relevant ADS holder. Accordingly, Shares represented by ADSs, for which voting instructions fail to specify the manner in which the ADS depositary is to vote or no timely voting instructions are received by the ADS depositary, will not be voted. If you hold your ADSs in a brokerage, bank or other nominee account, you must rely on the procedures of the broker, bank or other nominee through which you hold your ADSs if you wish to vote.

        Holders of ADSs will not be able to attend or vote directly at the extraordinary general meeting unless they cancel their ADSs and become registered in the Company's register of members as the holders of Shares prior to the close of business in the Cayman Islands on                , 2018, the Share record date. ADS holders who wish to cancel their ADSs need to make arrangements to deliver the ADSs to the ADS depositary for cancellation before the close of business in New York City on                , 2018 together with (a) delivery instructions for the corresponding Shares (name and address of the person who will be the registered holder of the Shares), (b) payment of the ADS cancellation fees ($0.05 per ADS to be cancelled pursuant to the terms of the Deposit Agreement), and any applicable taxes, and (c) a certification that the ADS holder either (i) held the ADSs as of the applicable ADS record date for the extraordinary general meeting and has not given, and will not give, voting instructions to the ADS depositary as to the ADSs being cancelled, or has given voting instructions to the ADS depositary as to the ADSs being cancelled but undertakes not to vote the corresponding Shares at the extraordinary general meeting, or (ii) did not hold the ADSs as of the applicable ADS record date for the extraordinary general meeting and undertakes not to vote the corresponding Shares at the extraordinary general meeting. If you hold your ADSs in a brokerage, bank or nominee account, please contact your broker, bank or nominee to find out what actions you need to take to instruct the broker, bank or nominee to cancel the ADSs on your behalf. Upon cancellation of the ADSs, the ADS depositary will arrange for JPMorgan Chase Bank, N.A., Hong Kong Branch, the custodian holding the Shares, to return the Shares to the Company's share registrar to transfer registration of the Shares to the former ADS holder (or a person designated by the former ADS holder). If after the registration of Shares in your name you wish to receive a certificate evidencing the Shares registered in your name, you will need to request the Company's Cayman

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registrar of the Shares to issue and mail a certificate to your attention. If the merger is not completed, the Company would continue to be a public company in the U.S. and the ADSs would continue to be listed on the Nasdaq Global Select Market. The Company's Shares are not listed and cannot be traded on any stock exchange other than the Nasdaq Global Select Market, and in such case only in the form of ADSs. As a result, if you have cancelled your ADSs to attend the extraordinary general meeting and the merger is not completed and you wish to be able to sell your Shares on a stock exchange, you would need to deposit your Shares into the Company's ADS program for the issuance of the corresponding number of ADSs, subject to the terms and conditions of applicable law and the Deposit Agreement, including, among other things, payment of relevant fees of the ADS depositary for the issuance of ADSs ($0.05 per ADS issued) and any applicable stock transfer taxes (if any) and related charges pursuant to the Deposit Agreement.

        Completing the proxy card in accordance with the instructions set forth on the proxy card will not deprive you of your right to attend the extraordinary general meeting and vote your Shares in person. Please note, however, that if your Shares are held of record by a broker, bank or other nominee and you wish to vote at the extraordinary general meeting in person, you must obtain from the registered holder a proxy issued in your name. If you submit a signed proxy card without indicating how you wish to vote, the Shares represented by your proxy card will be voted FOR the proposal to authorize and approve the merger agreement, the plan of merger, and the transactions contemplated by the merger agreement and the plan of merger, including the merger, FOR the proposal to authorize each director and officer of the Company to do all things necessary to give effect to merger agreement, the plan of merger, and the transactions contemplated by the merger agreement and the plan of merger, including the merger, and FOR the proposal to adjourn the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting, unless you appoint a person other than the chairman of the meeting as your proxy, in which case the Shares represented by your proxy card will be voted (or not submitted for voting) as your proxy determines.

        Shareholders who dissent from the merger will have the right to receive payment of the fair value of their Shares in accordance with Section 238 of the Cayman Islands Companies Law if the merger is completed, but only if they deliver to the Company, before the vote to authorize and approve the merger is taken at the extraordinary general meeting, a written objection to the merger and subsequently comply with all procedures and requirements of Section 238 of the Cayman Islands Companies Law for the exercise of dissenter rights, a copy of which is attached as Annex D to the accompanying proxy statement. The fair value of your Shares as determined under the Cayman Islands Companies Law could be more than, the same as, or less than the merger consideration you would receive pursuant to the merger agreement if you do not exercise dissenter rights with respect to your Shares.

        ADS HOLDERS WILL NOT HAVE THE RIGHT TO EXERCISE DISSENTER RIGHTS AND RECEIVE PAYMENT OF THE FAIR VALUE OF THE SHARES UNDERLYING THEIR ADSs. THE ADS DEPOSITARY WILL NOT EXERCISE OR ATTEMPT TO EXERCISE ANY DISSENTER RIGHTS WITH RESPECT TO ANY OF THE SHARES THAT IT HOLDS, EVEN IF AN ADS HOLDER REQUESTS THE ADS DEPOSITARY TO DO SO. ADS HOLDERS WISHING TO EXERCISE DISSENTER RIGHTS MUST, BEFORE          P. M. (NEW YORK CITY TIME) ON                 , 2018, SURRENDER THEIR ADSs TO THE ADS DEPOSITARY FOR CONVERSION INTO SHARES, PAY THE ADS DEPOSITARY'S FEES REQUIRED FOR THE CANCELLATION OF THEIR ADSs, AND PROVIDE INSTRUCTIONS FOR THE REGISTRATION OF THE CORRESPONDING SHARES IN THE COMPANY'S REGISTER OF MEMBERS, AND CERTIFY THAT THEY HELD THE ADSs AS OF THE ADS RECORD DATE AND HAVE NOT GIVEN, AND WILL NOT GIVE, VOTING INSTRUCTIONS AS TO THEIR ADSs, AND BECOME REGISTERED HOLDERS OF

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SHARES BY THE CLOSE OF BUSINESS IN THE CAYMAN ISLANDS ON THE SHARE RECORD DATE. THEREAFTER, SUCH FORMER ADS HOLDERS MUST ALSO COMPLY WITH THE PROCEDURES AND REQUIREMENTS FOR EXERCISING DISSENTER RIGHTS WITH RESPECT TO THE SHARES UNDER SECTION 238 OF THE CAYMAN ISLANDS COMPANIES LAW. IF THE MERGER IS NOT COMPLETED, THE COMPANY WOULD CONTINUE TO BE A PUBLIC COMPANY IN THE U.S. AND THE ADSs WOULD CONTINUE TO BE LISTED ON THE NASDAQ GLOBAL SELECT MARKET. THE COMPANY'S SHARES ARE NOT LISTED AND CANNOT BE TRADED ON ANY STOCK EXCHANGE OTHER THAN THE NASDAQ GLOBAL SELECT MARKET, AND IN SUCH CASE ONLY IN THE FORM OF ADSs. AS A RESULT, IF A FORMER ADS HOLDER HAS CANCELLED HIS, HER OR ITS ADSs TO EXERCISE DISSENTER RIGHTS AND THE MERGER IS NOT COMPLETED AND SUCH FORMER ADS HOLDER WISHES TO BE ABLE TO SELL HIS OR HER SHARES ON A STOCK EXCHANGE, SUCH FORMER ADS HOLDER WOULD NEED TO DEPOSIT HIS, HER OR ITS SHARES INTO THE COMPANY'S AMERICAN DEPOSITARY SHARES PROGRAM FOR THE ISSUANCE OF THE CORRESPONDING NUMBER OF ADSs, SUBJECT TO THE TERMS AND CONDITIONS OF APPLICABLE LAW AND THE DEPOSIT AGREEMENT, INCLUDING, AMONG OTHER THINGS, PAYMENT OF RELEVANT FEES OF THE ADS DEPOSITARY FOR THE ISSUANCE OF ADSs ($0.05 PER ADS ISSUED) AND ANY APPLICABLE STOCK TRANSFER TAXES (IF ANY) AND RELATED CHARGES PURSUANT TO THE DEPOSIT AGREEMENT.

        Neither the SEC nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger or passed upon the adequacy or accuracy of the disclosure in this letter or in the accompanying notice of the extraordinary general meeting or proxy statement. Any representation to the contrary is a criminal offense.

        If you have any questions or need assistance voting your Shares or ADSs, please contact          , the proxy solicitor, at          , or by email at          .

        Thank you for your cooperation and continued support.

Sincerely,   Sincerely,

  

Ruby Lu

 

  

Lee Ligang Zhang
Chairperson of the Special Committee   Chairman of the Board

        The accompanying proxy statement is dated                , 2018, and is first being mailed to the Company's shareholders and ADS holders on or about                , 2018.

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IKANG HEALTHCARE GROUP, INC.
NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS TO BE HELD
ON           , 2018

Dear Shareholder:

        Notice is hereby given that an extraordinary general meeting of the shareholders of iKang Healthcare Group, Inc. (referred to herein alternately as "the Company," "us," "we" or other terms correlative thereto), will be held on          , 2018 at          (Beijing time) at B-6F, Shimao Tower, 92A Jianguo Road, Chaoyang District, Beijing, the People's Republic of China.

        Only registered holders of Class A common shares of the Company, par value US$0.01 per share (each, a "Class A Share"), and Class C common shares, par value US$0.01 per share (each, a "Class C Share;" and the Class C Shares together with the Class A Shares, the "Shares"), at the close of business in the Cayman Islands on          , 2018 (the "Share record date") or their proxy holders are entitled to vote at this extraordinary general meeting or any adjournment thereof. At the extraordinary general meeting, you will be asked to consider and vote upon the following resolutions:

        THAT the agreement and plan of merger, dated as of March 26, 2018 (as amended on May 29, 2018, the "merger agreement"), among IK Healthcare Investment Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands ("Parent") and IK Healthcare Merger Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands and a wholly-owned subsidiary of Parent ("Merger Sub") and the Company (such merger agreement being in the form attached as Annex A to the accompanying proxy statement and to be produced and made available for inspection at the extraordinary general meeting), the plan of merger (the "plan of merger") required to be registered with the Cayman Registrar (such plan of merger being substantially in the form attached as Annex B to the accompanying proxy statement and to be produced and made available for inspection at the extraordinary general meeting) in order to give effect to the merger of Merger Sub with and into the Company, with the Company surviving as a wholly-owned subsidiary of Parent (the "merger"), and any and all transactions contemplated by the merger agreement and the plan of merger, including (i) the merger, (ii) the variation of the authorized share capital of the Company at the effective time of the merger from US$600,000 divided into (a) 58,000,000 Class A common shares of a par value of US$0.01 each and (b) 2,000,000 Class C common shares of a par value of US$0.01 each to US$50,000 divided into 50,000 of US$1.00 each (the "variation of capital"), and (iii) upon the merger becoming effective, the amendment and restatement of the memorandum and articles of association of the Company (as the surviving company) in the form attached to the plan of merger (the "amendment of the M&A"), be authorized and approved;

        THAT each director and officer of the Company be authorized to do all things necessary to give effect to the merger agreement, the plan of merger and the transactions contemplated by the merger agreement and the plan of merger, including the merger, the variation of capital and the amendment of the M&A; and

        THAT the extraordinary general meeting be adjourned in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting.

        Please refer to the accompanying proxy statement, which is attached to and made a part of this notice. A list of the Company's shareholders will be available at its principal executive office at B-6F,

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Shimao Tower, 92A Jianguo Road, Chaoyang District, Beijing, 100022, the People's Republic of China, during ordinary business hours for the two business days immediately prior to the extraordinary general meeting.

        After careful consideration and upon the unanimous recommendation of a special committee (the "Special Committee") of the board of directors (the "Board") of the Company, composed solely of directors who are unaffiliated to any member of the buyer group or the management of the Company, the Board (a) determined that it was advisable, fair to and in the best interests of the Company and the shareholders of the Company, including the unaffiliated shareholders, to enter into the merger agreement, the plan of merger and the transaction agreements contemplated by the merger agreement, (b) authorized and approved the execution, delivery and performance of the merger agreement and the transaction agreements contemplated by the merger agreement and the consummation of the contemplated transactions, including the merger, and (c) resolved to direct that the authorization and approval of the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, be submitted to a vote at an extraordinary general meeting of the shareholders with the recommendation of the Board that the shareholders of the Company authorize and approve by way of special resolution the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger. The Board recommends that you vote (1) FOR the proposal to authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement and the plan of merger, including the merger, and, upon the merger becoming effective, the variation of capital and the amendment of the M&A, (2) FOR the proposal to authorize each director and officer of the Company to do all things necessary to give effect to the merger agreement, the plan of merger and the transactions contemplated by the merger agreement and the plan of merger, including the merger, and (3) FOR the proposal to adjourn the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting.

        In order for the merger to be completed, the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, must be authorized and approved by a special resolution (as defined in the Cayman Islands Companies Law) of the Company's shareholders, which requires the affirmative vote of holders of Shares representing two-thirds or more of the voting rights of Shares present and voting in person or by proxy as a single class at the extraordinary general meeting.

        ShanghaiMed, Inc., Time Intelligent Finance Limited, Mr. He and Top Fortune Win Ltd. (collectively, the "Rollover Shareholders") have entered into a support agreement, dated as of March 26, 2018 (as amended on May 29, 2018 and as may be further amended from time to time, the "Support Agreement") with Mr. Zhang, Parent and IK Healthcare Holdings Limited, pursuant to which, each of the Rollover Shareholders has agreed to, subject to the terms and conditions set forth therein and among other obligations, vote in favor of the authorization and approval of the merger agreement and the transactions contemplated by the merger agreement, including the merger. As of the date of this proxy statement, the Rollover Shareholders beneficially own 8,527,846 Class A Shares and 805,100 Class C Shares, including Class A Shares represented by the American depositary shares, each representing 1/2 of a Class A Share (the "ADSs"), which represent approximately 26.6% of the total issued and outstanding Shares and approximately 44.4% of the total voting power of the outstanding Shares.

        If you plan to attend the extraordinary general meeting in person, we request that you submit your proxy in accordance with the instructions set forth on the proxy card as promptly as possible. To be valid, your proxy card must be completed, signed and returned to the Company's offices (to the attention of: Investor Relations Department at B-6F, Shimao Tower, 92A Jianguo Road, Chaoyang

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District, Beijing, 100022, the People's Republic of China no later than          , 2018 at           a.m. (Beijing time). The proxy card is the "instrument of proxy" and the "instrument appointing a proxy" as referred to in the Company's articles of association. Voting at the extraordinary general meeting will take place by poll voting as the chairman of the meeting has undertaken to demand poll voting at the meeting. Each shareholder has one vote for each Class A Share or fifteen votes for each Class C Share, in each case held as of the close of business in the Cayman Islands on the Share record date. If you receive more than one proxy card because you own Shares that are registered in different names, please vote all of your Shares shown on each of your proxy cards in accordance with the instructions set forth on the proxy card.

        Completing the proxy card in accordance with the instructions set forth on the proxy card will not deprive you of your right to attend the extraordinary general meeting and vote your Shares in person. Please note, however, that if your Shares are registered in the name of a broker, bank or other nominee and you wish to vote at the extraordinary general meeting in person, you must obtain from the record holder a proxy issued in your name.

        If you abstain from voting, fail to cast your vote in person, fail to return your proxy card in accordance with the instructions set forth on the proxy card, or fail to give voting instructions to your broker, bank or other nominee, your vote will not be counted.

        When proxies are properly dated, executed and returned by holders of Shares, the Shares they represent will be voted at the extraordinary general meeting in accordance with the instructions of the shareholders. If no specific instructions are given by such shareholders, such Shares will be voted "FOR" the proposals as described above, unless you appoint a person other than the chairman of the meeting as proxy, in which case the Shares represented by your proxy card will be voted (or not submitted for voting) as your proxy determines.

        If you own ADSs as of the close of business in New York City on          , 2018 (the "ADS record date") (and do not cancel such ADSs and become a registered holder of the Shares underlying such ADSs as explained below), you cannot vote at the extraordinary general meeting directly, but you may instruct JPMorgan Chase Bank, N.A., in its capacity as the ADS depositary (the "ADS depositary") and the holder of the Shares underlying your ADSs how to vote the Shares underlying your ADSs. The ADS depositary must receive your instructions no later than 12:00 p.m. (New York City time) on           , 2018 in order to ensure the Shares underlying your ADSs are properly voted at the extraordinary general meeting. If you hold your ADSs in a brokerage, bank or other nominee account, you must rely on the procedures of the broker, bank or other nominee through which you hold your ADSs if you wish to vote.

        Alternatively, if you own ADSs as of the close of business in New York City on the ADS record date, you may vote at the extraordinary general meeting directly if you cancel your ADSs and become a registered holder of the Shares underlying your ADSs prior to the close of business in the Cayman Islands on          , 2018, the Share record date. If you wish to cancel your ADSs for the purpose of voting Shares directly, you need to make arrangements to deliver your ADSs to the ADS depositary for cancellation before the close of business in New York City on           , 2018 together with (a) delivery instructions for the corresponding Shares (name and address of person who will be the registered holder of such Shares),(b) payment of the ADS cancellation fees ($0.05 per ADS to be cancelled pursuant to the terms of the deposit agreement, dated as of April 8, 2014, by and among the Company, the ADS depositary and all holders and beneficial owners from time to time of ADSs issued thereunder (the "Deposit Agreement")) and any applicable taxes and (c) a certification that you either (i) held the ADSs as of the ADS record date and have not given, and will not give, voting instructions to the ADS depositary as to the ADSs being cancelled or have given voting instructions to the ADS depositary as to the ADSs being cancelled but undertake not to vote the corresponding Shares at the extraordinary general meeting or (ii) did not hold the ADSs as of the ADS record date and undertakes

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not to vote the corresponding Shares at the extraordinary general meeting. If you hold your ADSs in a brokerage, bank or other nominee account, please contact your broker, bank or other nominee to find out what actions you need to take to instruct the broker, bank or other nominee to cancel the ADSs on your behalf.

        Shareholders who dissent from the merger will have the right to receive payment of the fair value of their Shares in accordance with Section 238 of the Cayman Islands Companies Law if the merger is completed, but only if they deliver to the Company, before the vote to authorize and approve the merger is taken at the extraordinary general meeting, a written objection to the merger and subsequently comply with all procedures and requirements of Section 238 of the Cayman Islands Companies Law for the exercise of dissenters' rights, a copy of which is attached as Annex D to the accompanying proxy statement. The fair value of their Shares as determined under the Cayman Islands Companies Law could be more than, the same as, or less than the merger consideration they would receive pursuant to the merger agreement if they do not exercise dissenters' rights with respect to their Shares.

        ADS HOLDERS WILL NOT HAVE THE RIGHT TO EXERCISE DISSENTERS' RIGHTS AND RECEIVE PAYMENT OF THE FAIR VALUE OF THE SHARES UNDERLYING THEIR ADSs. THE ADS DEPOSITARY WILL NOT EXERCISE OR ATTEMPT TO EXERCISE ANY DISSENTERS' RIGHTS WITH RESPECT TO ANY OF THE SHARES THAT IT HOLDS, EVEN IF AN ADS HOLDER REQUESTS THE ADS DEPOSITARY TO DO SO. ADS HOLDERS WISHING TO EXERCISE DISSENTERS' RIGHTS MUST, BEFORE            P. M. (NEW YORK CITY TIME) ON           ,           , SURRENDER THEIR ADSs TO THE ADS DEPOSITARY, PAY THE ADS DEPOSITARY'S FEES REQUIRED FOR THE CANCELLATION OF THEIR ADSs, AND PROVIDE INSTRUCTIONS FOR THE REGISTRATION OF THE CORRESPONDING SHARES IN THE COMPANY'S REGISTER OF MEMBERS, AND CERTIFY THAT THEY HELD THE ADSs AS OF THE ADS RECORD DATE AND HAVE NOT GIVEN, AND WILL NOT GIVE, VOTING INSTRUCTIONS AS TO THEIR ADSs, AND BECOME REGISTERED HOLDERS OF SHARES BY THE CLOSE OF BUSINESS IN THE CAYMAN ISLANDS ON THE SHARE RECORD DATE. THEREAFTER, SUCH FORMER ADS HOLDERS MUST COMPLY WITH THE PROCEDURES AND REQUIREMENTS FOR EXERCISING DISSENTERS' RIGHTS WITH RESPECT TO THE SHARES UNDER SECTION 238 OF THE CAYMAN ISLANDS COMPANIES LAW. IF THE MERGER IS NOT COMPLETED, THE COMPANY WOULD CONTINUE TO BE A PUBLIC COMPANY IN THE UNITED STATES AND ADSs WOULD CONTINUE TO BE LISTED ON THE NASDAQ GLOBAL SELECT MARKET. SHARES ARE NOT LISTED AND CANNOT BE TRADED ON ANY STOCK EXCHANGE OTHER THAN THE NASDAQ GLOBAL SELECT MARKET, AND IN SUCH CASE ONLY IN THE FORM OF ADSs. AS A RESULT, IF A FORMER ADS HOLDER HAS CANCELLED HIS, HER OR ITS ADSs TO EXERCISE DISSENTERS' RIGHTS AND THE MERGER IS NOT COMPLETED AND SUCH FORMER ADS HOLDER WISHES TO BE ABLE TO SELL HIS, HER OR ITS SHARES ON A STOCK EXCHANGE, SUCH FORMER ADS HOLDER WOULD NEED TO DEPOSIT HIS, HER OR ITS SHARES INTO THE COMPANY'S ADS PROGRAM FOR THE ISSUANCE OF THE CORRESPONDING NUMBER OF ADSs, SUBJECT TO THE TERMS AND CONDITIONS OF APPLICABLE LAW AND THE DEPOSIT AGREEMENT, INCLUDING, AMONG OTHER THINGS, PAYMENT OF RELEVANT FEES OF THE ADS DEPOSITARY FOR THE ISSUANCE OF ADSs AND APPLICABLE SHARE TRANSFER TAXES (IF ANY) AND RELATED CHARGES PURSUANT TO THE DEPOSIT AGREEMENT.

        PLEASE DO NOT SEND YOUR SHARE CERTIFICATES AT THIS TIME. IF THE MERGER IS COMPLETED, YOU WILL BE SENT INSTRUCTIONS REGARDING THE SURRENDER OF YOUR SHARE CERTIFICATES.

        If you have any questions or need assistance voting your Shares, please contact          , the proxy solicitor at          , or by email at          .

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        The merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, are described in the accompanying proxy statement. Copies of the merger agreement and the plan of merger are included as Annex A and Annex B, respectively, to the accompanying proxy statement. We urge you to read the entire accompanying proxy statement carefully.

        Notes:

    BY ORDER OF THE BOARD OF DIRECTORS,

 

 

Lee Ligang Zhang

 

 

Chairman of the Board

 

 

          , 2018

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PROXY STATEMENT
Dated          , 2018
SUMMARY VOTING INSTRUCTIONS

        Ensure that your shares of iKang Healthcare Group, Inc. can be voted at the extraordinary general meeting by submitting your proxy or contacting your broker, bank or other nominee.

        If your shares are registered in the name of a broker, bank or other nominee:    check the voting instruction card forwarded by your broker, bank or other nominee to see which voting options are available or contact your broker, bank or other nominee in order to obtain directions as to how to ensure that your shares are voted at the extraordinary general meeting.

        If your shares are registered in your name:    submit your proxy as soon as possible by signing, dating and returning the accompanying proxy card in the enclosed postage-paid envelope, so that your shares can be voted at the extraordinary general meeting in accordance with your instructions.

        If you submit your signed proxy card without indicating how you wish to vote, the shares represented by your proxy will be voted in favor of the resolutions to be proposed at the extraordinary general meeting, unless you appoint a person other than the chairman of the meeting as proxy, in which case the shares represented by your proxy will be voted (or not submitted for voting) as your proxy determines.

        If you have any questions, require assistance with voting your proxy card, or need additional copies of proxy material, please contact          , the proxy solicitor at          , or by email at          .

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TABLE OF CONTENTS

 
  Page  

SUMMARY TERM SHEET

    1  

QUESTIONS AND ANSWERS ABOUT THE EXTRAORDINARY GENERAL MEETING AND THE MERGER

   
17
 

SPECIAL FACTORS

   
28
 

MARKET PRICE OF THE COMPANY'S ADSs, DIVIDENDS AND OTHER MATTERS

   
109
 

THE EXTRAORDINARY GENERAL MEETING

   
111
 

THE MERGER AGREEMENT AND PLAN OF MERGER

   
119
 

PROVISIONS FOR UNAFFILIATED SHAREHOLDERS

   
139
 

DISSENTERS' RIGHTS

   
140
 

FINANCIAL INFORMATION

   
142
 

TRANSACTIONS IN THE SHARES AND ADSs

   
144
 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF THE COMPANY

   
147
 

FUTURE SHAREHOLDER PROPOSALS

   
150
 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

   
151
 

WHERE YOU CAN FIND MORE INFORMATION

   
153
 

ANNEX A: AGREEMENT AND PLAN OF MERGER AND AMENDMENT NO. 1 TO THE AGREEMENT AND PLAN OF MERGER

   
A-1
 

ANNEX B: PLAN OF MERGER

   
B-1
 

ANNEX C: OPINION OF J.P. MORGAN SECURITIES (ASIA PACIFIC) LIMITED AS FINANCIAL ADVISOR

   
C-1
 

ANNEX D: CAYMAN COMPANIES LAW CAP. 22 (LAW 3 OF 1961, AS CONSOLIDATED AND REVISED)—SECTION 238

   
D-1
 

ANNEX E: SUPPORT AGREEMENT

   
E-1
 

ANNEX F: DIRECTORS AND EXECUTIVE OFFICERS OF EACH FILING PERSON

   
F-1
 

ANNEX G: FORM OF PROXY CARD

   
G-1
 

ANNEX H: FORM OF ADS VOTING INSTRUCTION CARD

   
H-1
 

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SUMMARY TERM SHEET

        This "Summary Term Sheet" and the "Questions and Answers About the Extraordinary General Meeting and the Merger" highlight selected information contained in this proxy statement regarding the merger and may not contain all of the information that may be important to your consideration of the merger and other transactions contemplated by the merger agreement. You should carefully read this entire proxy statement and the other documents to which this proxy statement refers for a more complete understanding of the matters being considered at the extraordinary general meeting. In addition, this proxy statement incorporates by reference important business and financial information about the Company. You are encouraged to read all of the documents incorporated by reference into this proxy statement and you may obtain such information without charge by following the instructions in "Where You Can Find More Information" beginning on page 153. In this proxy statement, the terms "the Company," "us," "we" or other terms correlative thereto refer to iKang Healthcare Group, Inc. All references to "dollars," "$" and "US$" in this proxy statement are to U.S. dollars, and all references to "RMB" in this proxy statement are to Renminbi, the lawful currency of the People's Republic of China (the "PRC").

The Parties Involved in the Merger

The Company

        The Company is an exempted company with limited liability incorporated under the laws of the Cayman Islands and one of the largest providers in China's fast-growing private preventive healthcare space through its nationwide healthcare services network.

        Our principal executive offices are located at B-6F, Shimao Tower, 92A Jianguo Road, Chaoyang District, Beijing 100022, the PRC. The Company's telephone number at this address is +86 10 5320 6688 and fax number is +86 10 5320 6689.

        For a description of the Company's history, development, business and organizational structure, see the Company's Annual Report on Form 20-F for the fiscal year ended March 31, 2017, filed on August 15, 2017, which is incorporated herein by reference. Please see "Where You Can Find More Information" beginning on page 153 for a description of how to obtain a copy of the Company's Annual Report.

Parent

        IK Healthcare Investment Limited ("Parent") is an exempted company with limited liability incorporated under the laws of the Cayman Islands and a wholly owned subsidiary of Holdco. Parent was formed by Holdco solely for the purpose of forming and holding all of the equity interests in Merger Sub (as defined below) and engaging in the transactions contemplated by the merger agreement (as defined below), including the merger (as defined below). The business address of Parent is Suite 3206, One Exchange Square, 8 Connaught Place, Central, Hong Kong.

Merger Sub

        IK Healthcare Merger Limited ("Merger Sub") is an exempted company with limited liability incorporated under the laws of the Cayman Islands and a wholly owned subsidiary of Parent. Merger Sub was formed by Parent solely for the purpose of effecting the merger. The business address of Merger Sub is Suite 3206, One Exchange Square, 8 Connaught Place, Central, Hong Kong.

Holdco

        IK Healthcare Holdings Limited ("Holdco") is an exempted company with limited liability incorporated under the laws of the Cayman Islands. Holdco is a holding company formed solely for the purpose of holding all of the equity interests in Parent. Upon the closing of the merger, all of the

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equity interests in Holdco will be held by the Sponsors and the Rollover Shareholders. The business address of Holdco is Suite 3206, One Exchange Square, 8 Connaught Place, Central, Hong Kong.

Yunfeng Fund III, L.P.

        Yunfeng Fund III, L.P. ("YF Fund III") is an exempted limited partnership established under the laws of the Cayman Islands. YF Fund III is an investment fund which was formed for the purpose of making portfolio investments in accordance with its investment guidelines and engaging in such other activities incidental or ancillary thereto, including, without limitation, holding interests in Holdco and completing the transactions contemplated by the merger agreement, including the merger and the related financing transactions. YF Fund III has not engaged in any business except for activities permitted by its exempted limited partnership agreement ("YF Fund III LPA"), including activities incidental to its formation and in connection with the transactions contemplated by the merger agreement, including the merger. The principal business address of YF Fund III is Suite 3206, One Exchange Square, 8 Connaught Place, Central, Hong Kong.

        Yunfeng Investment III, Ltd. ("YF Investment III") is the general partner of YF Fund III. YF Investment III is an exempted company with limited liability incorporated under the laws of the Cayman Islands. The principal business of YF Investment III is to serve as the general partner of YF Fund III and as the general partner (or in a similar capacity) for other investment partnerships or alternative investment vehicles formed pursuant to the YF Fund III LPA (including YF Fund III Parallel (as defined below)) and to engage in other lawful businesses under the applicable laws and all things necessary or incidental thereto. The principal business address of YF Investment III is Suite 3206, One Exchange Square, 8 Connaught Place, Central, Hong Kong.

Yunfeng Fund III Parallel Fund, L.P.

        Yunfeng Fund III Parallel Fund, L.P. ("YF Fund III Parallel," together with YF Fund III, "YFC") is an exempted limited partnership established under the laws of the Cayman Islands. YF Fund III Parallel is an investment fund which was formed for the purpose of making portfolio investments in accordance with its investment guidelines and engaging in such other activities incidental or ancillary thereto, including, without limitation, holding interests in Holdco and completing the transactions contemplated by the merger agreement, including the merger and the related financing transactions. YF Fund III Parallel has not engaged in any business except for activities permitted by its exempted limited partnership agreement, including activities incidental to its formation and in connection with the transactions contemplated by the merger agreement, including the merger. The principal business address of YF Fund III Parallel is Suite 3206, One Exchange Square, 8 Connaught Place, Central, Hong Kong.

        YF Investment III is also the general partner of YF Fund III Parallel.

Taobao China Holding Limited

        Taobao China Holding Limited ("Taobao China") is a company incorporated under the laws of Hong Kong. Taobao China is an indirect wholly-owned subsidiary of Alibaba Group Holding Limited, a company incorporated in the Cayman Islands, the American depositary shares of which are listed on the New York Stock Exchange. Taobao China is the holding company for certain subsidiaries relating to Taobao Marketplace. The principal business address of Taobao China is 26th Floor, Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong.

Boyu Capital Fund III, L.P.

        Boyu Capital Fund III, L.P. ("Boyu Fund III") is an exempted limited partnership established under the laws of the Cayman Islands. The principal business of Boyu Fund III is investment activities.

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The registered office of Boyu Fund III is located at Ugland House, 121 South Church Street, Grand Cayman, KY1-1104, Cayman Islands and its telephone number is +1 345 949 8066. Boyu Capital General Partner III, L.P. ("Boyu GP"), an exempted limited partnership registered under the laws of the Cayman Islands, is the general partner of Boyu Fund III. The principal business of Boyu GP is investment activities.

Mr. Lee Ligang Zhang

        Mr. Lee Ligang Zhang ("Mr. Zhang") is the founder, chairman of the board of directors and chief executive officer of the Company. Mr. Zhang is a PRC citizen. The business address of Mr. Zhang is c/o iKang Healthcare Group, Inc., B-6F, Shimao Tower, 92A Jianguo Road, Chaoyang District, Beijing, 100022, the PRC, and his business telephone number is +86 10 5320 6688.

Time Intelligent Finance Limited

        Time Intelligent Finance Limited ("Time Intelligent") is a company incorporated under the laws of the British Virgin Islands and beneficially owned by Mr. Zhang's family trust. The business address of Time Intelligent is c/o iKang Healthcare Group, Inc., B-6F, Shimao Tower, 92A Jianguo Road, Chaoyang District, Beijing, 100022, the PRC, and its business telephone number is +86 10 5320 6688.

ShanghaiMed, Inc.

        ShanghaiMed, Inc. ("ShanghaiMed") is a company incorporated under the laws of the British Virgin Islands and a wholly-owned subsidiary of Time Intelligent. The business address of ShanghaiMed is c/o iKang Healthcare Group, Inc., B-6F, Shimao Tower, 92A Jianguo Road, Chaoyang District, Beijing, 100022, the PRC, and its business telephone number is +86 10 5320 6688.

Mr. Boquan He

        Mr. Boquan He ("Mr. He") has served as our director since July 2007. Mr. He is a PRC citizen. The business address of Mr. He is Unit 3213, Metro Plaza, No. 183-187 Tianhe Road (N), Guangzhou, the PRC, 510620.

Top Fortune Win Ltd.

        Top Fortune Win Ltd. ("Top Fortune") is a British Virgin Islands company ultimately owned by Mr. He. The business address of Top Fortune is Unit 3213, Metro Plaza, No. 183-187 Tianhe Road (N), Guangzhou, the PRC, 510620.

        Throughout this proxy statement, (i) Mr. Zhang, ShanghaiMed and Time Intelligent are collectively referred to as the "Founder Parties," (ii) Mr. He and Top Fortune are collectively referred to as the "Mr. He Parties;" (iii) YF Fund III, YF Fund III Parallel, Taobao China and Boyu Fund III are collectively referred to as the "Sponsors," (iv) Taobao China, YF Fund III, YF Fund III Parallel, Boyu Fund III, ShanghaiMed and Top Fortune are collectively referred to as the "Guarantors," (v) ShanghaiMed, Time Intelligent, Mr. He and Top Fortune are collectively referred to as the "Rollover Shareholders," (vi) Mr. Zhang and Mr. He are collectively referred to as the "Beneficial Owners," and (vii) the Rollover Shareholders, Mr. Zhang, the Sponsors, Holdco, Parent and Merger Sub are collectively referred to herein as the "Buyer Group." Additional information regarding the parties to the merger is set forth in Annex F, which is attached hereto and incorporated herein by reference.

        During the last five years, none of the persons referred to above under the caption "The Parties Involved in the Merger," or the respective directors or executive officers of the Company, members of the Buyer Group and their affiliates as listed in Annex F of this proxy statement has been (a) convicted

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in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.

The Merger (Page 119)

        You are being asked to vote to authorize and approve the agreement and plan of merger dated as of March 26, 2018 among the Company, Parent and Merger Sub (as amended on May 29, 2018, the "merger agreement"), and the plan of merger (the "plan of merger") required to be filed with the Registrar of Companies of the Cayman Islands (the "Cayman Registrar"), pursuant to which, once the merger agreement and the plan of merger are approved and authorized by the requisite vote of the shareholders of the Company and the other conditions to the completion of the transactions contemplated by the merger agreement are satisfied or waived in accordance with the terms of the merger agreement, Merger Sub will be merged with and into the Company and cease to exist, with the Company continuing as the surviving company (the "surviving company") (the "merger"). The surviving company will be wholly-owned by Parent (which will be beneficially owned by the Sponsors and the Rollover Shareholders), and will continue to do business under the name "iKang Healthcare Group, Inc." following the merger. If the merger is completed, the Company will cease to be a publicly traded company and the Company's ADSs will cease to be listed on the NASDAQ Global Select Market ("NASDAQ"), and price quotations with respect to sales of the ADSs in the public market will no longer be available. In addition, ninety (90) days after the filing of Form 15 in connection with the completion of the merger or such longer period as may be determined by the SEC, registration of the ADSs and the underlying Shares under the Securities Exchange Act of 1934, as amended (the "Exchange Act") will be terminated. After the effective time of the merger, the Company will no longer be required to file periodic reports with the SEC or otherwise be subject to the United States federal securities laws, including the Sarbanes-Oxley Act of 2002, applicable to public companies. Copies of the merger agreement and the plan of merger are attached as Annex A and Annex B, respectively, to this proxy statement. You should read the merger agreement and the plan of merger in their entirety because they, and not this proxy statement, are the legal documents that govern the merger.

Merger Consideration (Page 120)

        Under the terms of the merger agreement, at the effective time of the merger, each Share (other than the Excluded Shares) issued and outstanding immediately prior to the effective time of the merger will be cancelled and cease to exist and will be exchanged for the right to receive US$41.20 (the "per share merger consideration") and each ADS (other than any ADS representing the Excluded Shares) issued and outstanding will be cancelled in exchange for the right to receive US$20.60, in each case, in cash, without interest and net of any applicable withholding taxes. The surviving company will bear any applicable fees, charges and expenses of JPMorgan Chase Bank, N.A., in its capacity as the ADS depositary (the "ADS depositary") in connection with the distribution of the merger consideration to holders of ADSs and the cancellation of the ADSs, including applicable ADS cancellation fees pursuant to the terms of the deposit agreement, dated as of April 8, 2014, by and among the Company, the ADS depositary and all holders and beneficial owners from time to time of ADSs issued thereunder (the "Deposit Agreement"). Notwithstanding the foregoing, if the merger is completed, the following Shares (collectively, the "Excluded Shares") will not be cancelled and exchanged for the right to receive the consideration described in the immediately preceding sentence:

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        Each Excluded Share issued and outstanding immediately prior to the effective time of the merger shall be cancelled and cease to exist without payment of any consideration or distribution therefor.

        The Rollover Shares will be cancelled for no consideration in exchange for newly issued ordinary shares of Holdco.

        In addition, each Share owned by shareholders who have validly exercised and have not effectively withdrawn or lost their dissenter rights under the Cayman Islands Companies Law (the "Dissenting Shares") will be cancelled and cease to exist in exchange for the right to receive the fair value of such Dissenting Shares determined in accordance with the provisions of Section 238 of the Cayman Islands Companies Law.

Treatment of Company Options (Page 120)

        At the effective time of the merger, the Company will terminate the Company's share incentive plans adopted in February and April 2013 and March 2014, respectively (the "Share Incentive Plans"), and all relevant award agreements entered into under the Share Incentive Plans, and cancel all options to purchase Shares or ADSs (the "Company Options") that are then outstanding and unexercised, whether or not vested or exercisable. As soon as practicable after the effective time of the merger, each holder of a Company Option that is cancelled at the effective time of the merger will have the right to receive an amount in cash equal to the product of (i) the excess, if any, of US$41.20 over the applicable per share exercise price of such Company Option and (ii) the number of Shares underlying such Company Option; except that Company Options to purchase 500,000 Class A Shares held by Mr. Zhang and Company Options to purchase 250,000 Class A Shares held by Ms. Feiyan Huang will be cancelled for no consideration.

Record Date and Voting Information (Page 112)

        You are entitled to vote at the extraordinary general meeting if you have Shares registered in your name at the close of business in the Cayman Islands on          , 2018, the record date for voting Shares at the extraordinary general meeting (the "Share record date"). If you own Shares at the close of business in the Cayman Islands on the Share record date, the deadline for you to lodge your proxy card and vote is          , 2018 at           p.m. (Beijing time).

        If you own ADSs as of the close of business in New York City on          , 2018 (the "ADS record date") (and do not cancel such ADSs and become a registered holder of the Shares underlying such ADSs as explained below), you cannot vote at the extraordinary general meeting directly, but you may instruct the ADS depositary in its capacity as the holder of the Shares underlying your ADSs how to vote the Shares underlying your ADSs. The ADS depositary must receive your instructions no later than            a.m. (New York City time) on          , 2018 in order to ensure the Shares underlying your ADSs are properly voted at the extraordinary general meeting. If you hold your ADSs in a brokerage, bank or other nominee account, you must rely on the procedures of the broker, bank or other nominee through which you hold your ADSs if you wish to vote. Alternatively, if you own ADSs as of the close of business in New York City on the ADS record date, you may vote at the extraordinary general meeting directly if you cancel your ADSs and become a registered holder of the Shares underlying your ADSs prior to the close of business in the Cayman Islands on          , 2018, the Share record date and you certify that you have not voted, and will not vote, the ADSs. Each holder has one vote for each Class A Share or fifteen votes for each Class C Share, in each case held as of the close of business in the Cayman Islands on the Share record date. We expect that, as of the Share record date, there will be          Class A Shares and          Class C Shares entitled to be voted at the extraordinary general meeting. See "Summary Term Sheet—Voting Information" below.

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Shareholder Vote Required to Approve the Merger Agreement and Plan of Merger (Page 113)

        In order for the merger to be completed, the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, must be authorized and approved by a special resolution (as defined in the Cayman Islands Companies Law) of the Company's shareholders, which requires an affirmative vote of holders of Shares representing two-thirds or more of the voting rights of Shares present and voting in person or by proxy as a single class at the extraordinary general meeting (the "Requisite Company Vote").

        As of the date of this proxy statement, the Rollover Shareholders beneficially own 8,527,846 Class A Shares and 805,100 Class C Shares, including Class A Shares represented by ADSs, which represent approximately 26.6% of the total issued and outstanding Shares and approximately 44.4% of the total voting power of the outstanding Shares. See "Security Ownership of Certain Beneficial Owners and Management of the Company" beginning on page 147 for additional information. Pursuant to the terms of the Support Agreement (as defined below), these Shares (including such Shares represented by ADSs) will be voted in favor of the merger, at the extraordinary general meeting.

Voting Information (Page 112)

        Before voting your Shares, we encourage you to read this proxy statement in its entirety, including all of the annexes, attachments, exhibits and materials incorporated by reference, and carefully consider how the merger will affect you. To ensure that your Shares can be voted at the extraordinary general meeting, please complete the accompanying proxy card in accordance with the instructions set forth on the proxy card as soon as possible. The deadline for you to lodge your proxy card is          , 2018, at            p.m. (Beijing time). If a broker, bank or other nominee holds your Shares in "street name," your broker, bank or other nominee should provide you with instructions on how to vote your Shares. Your broker, bank or other nominee will not vote your Shares in the absence of specific instructions from you. These non-voted Shares are referred to as "broker non-votes."

Dissenters' Rights of Shareholders and ADS Holders (Page 117)

        Shareholders who elect to dissent from the merger will have the right to receive payment of the fair value of their Shares in accordance with Section 238 of the Cayman Islands Companies Law if the merger is completed, but only if they deliver to the Company, before the vote to authorize and approve the merger is taken at the extraordinary general meeting, a written objection to the merger and subsequently comply with all procedures and requirements of Section 238 of the Cayman Islands Companies Law for the exercise of dissenters' rights, which is attached as Annex D to this proxy statement. The fair value of your Shares as determined under the Cayman Islands Companies Law could be more than, the same as, or less than the merger consideration you would receive pursuant to the merger agreement if you do not exercise dissenters' rights with respect to your Shares.

        ADS HOLDERS WILL NOT HAVE THE RIGHT TO EXERCISE DISSENTERS' RIGHTS AND RECEIVE PAYMENT OF THE FAIR VALUE OF THE SHARES UNDERLYING THEIR ADSs. THE ADS DEPOSITARY WILL NOT EXERCISE OR ATTEMPT TO EXERCISE ANY DISSENTERS' RIGHTS WITH RESPECT TO ANY OF THE SHARES THAT IT HOLDS, EVEN IF AN ADS HOLDER REQUESTS THE ADS DEPOSITARY TO DO SO. ADS HOLDERS WISHING TO EXERCISE DISSENTERS' RIGHTS MUST, BEFORE           P.M. (NEW YORK CITY TIME) ON          , 2018, SURRENDER THEIR ADSs TO THE ADS DEPOSITARY, PAY THE ADS DEPOSITARY'S FEES REQUIRED FOR THE CANCELLATION OF THEIR ADSs, AND PROVIDE INSTRUCTIONS FOR THE REGISTRATION OF THE CORRESPONDING SHARES IN THE COMPANY'S REGISTER OF MEMBERS, AND CERTIFY THAT THEY HAVE NOT GIVEN, AND WILL NOT GIVE, VOTING INSTRUCTIONS AS TO THEIR ADSs, AND BECOME REGISTERED

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HOLDERS OF SHARES AND BECOME REGISTERED HOLDERS OF SHARES BY THE CLOSE OF BUSINESS IN THE CAYMAN ISLANDS ON THE SHARE RECORD DATE. THEREAFTER, SUCH FORMER ADS HOLDERS MUST COMPLY WITH THE PROCEDURES AND REQUIREMENTS FOR EXERCISING DISSENTERS' RIGHTS WITH RESPECT TO THE SHARES UNDER SECTION 238 OF THE CAYMAN ISLANDS COMPANIES LAW.

        We encourage you to read the section of this proxy statement entitled "Dissenters' Rights" as well as Annex D to this proxy statement carefully and to consult your Cayman Islands legal counsel if you desire to exercise your dissenters' rights.

Purposes and Effects of the Merger (Page 85)

        The purpose of the merger is to enable Parent to acquire 100% control of the Company in a transaction in which the holders of Shares and ADSs (other than the Excluded Shares, the Dissenting Shares and ADSs representing the Excluded Shares or the Dissenting Shares) will be cashed out in exchange for US$41.20 per Share or US$20.60 per ADS, respectively, without interest and net of any applicable withholding taxes. See "Special Factors—Purposes of and Reasons for the Merger" beginning on page 85 for additional information.

        Our ADSs are currently listed on NASDAQ under the symbol "KANG." It is expected that, following the consummation of the merger, the Company will cease to be a publicly traded company and will instead become a private company beneficially owned by the Buyer Group. See "Special Factors—Effect of the Merger on the Company" beginning on page 86 for additional information.

Plans for the Company after the Merger (Page 90)

        Following the completion of the merger, Parent will own 100% of the equity interest in the surviving company. The Buyer Group anticipates that the Company will continue to conduct its operations substantially as they are currently being conducted, except that it will cease to be a publicly traded company and will instead be a wholly owned subsidiary of Parent.

        Following the completion of the merger and the anticipated deregistration, the Company will no longer be subject to the Exchange Act or the compliance and reporting requirements of NASDAQ and the related direct and indirect costs and expenses.

Recommendations of the Special Committee and the Board (Page 64)

        The Special Committee, after consultation with its financial advisor and legal counsel, unanimously:

        After careful consideration and upon the unanimous recommendation of the Special Committee and after each director duly disclosed his or her interests in the transactions contemplated by the merger agreement, the Board recommends that you vote (1) FOR the proposal to authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger

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agreement and the plan of merger, including the merger and, upon the merger becoming effective, the variation of capital and the amendment of the M&A, (2) FOR the proposal to authorize each director and officer of the Company to do all things necessary to give effect to the merger agreement, the plan of merger and the transactions contemplated by the merger agreement and the plan of merger, including the merger; and (3) FOR the proposal to adjourn the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting.

Position of the Buyer Group as to the Fairness of the Merger (Page 71)

        Each member of the Buyer Group believes that the merger is fair to the unaffiliated shareholders. Their belief is based upon the factors discussed under the section entitled "Special Factors—Position of the Buyer Group as to the Fairness of the Merger" beginning on page 71.

Financing of the Merger (Page 92)

        The Company and the Buyer Group estimate that the total amount of funds necessary to complete the merger and the related transactions, including payment of fees and expenses in connection with the merger, is approximately US$1.50 billion, assuming no exercise of dissenters' rights by shareholders of the Company.

        The Buyer Group expects to provide this amount through a combination of (i) cash contributions contemplated by the equity commitment letters, dated as of March 26, 2018, as amended on May 29, 2018, by and between Parent and each of YF Fund III, YF Fund III Parallel and Taobao China, respectively (collectively, the "March 26 Equity Commitment Letters"), (ii) cash contributions contemplated by the equity commitment letter, dated as of May 29, 2018, by and between Parent and Boyu Fund III (together with the March 26 Equity Commitment Letters, the "Equity Commitment Letters") and (iii) rollover financing comprised of the Rollover Shares. Under the terms and subject to the conditions of the Equity Commitment Letters, YF Fund III, YF Fund III Parallel, Taobao China and Boyu Fund III have committed to provide equity financing in an aggregate amount of approximately US$1.15 billion to Parent to complete the merger. See "Special Factors—Financing of the Merger" beginning on page 92 for additional information.

Limited Guarantees (Page 95)

        Concurrently with the execution and delivery of the merger agreement on March 26, 2018, the Company and each of ShanghaiMed, Top Fortune, YF Fund III, YF Fund III Parallel and Taobao China entered into their respective limited guarantee, each dated as of March 26, 2018 and amended on May 29, 2018 (as may be further amended from time to time, each a "March 26 Limited Guarantee" and collectively the "March 26 Limited Guarantees") and Boyu Fund III entered into a limited guarantee on May 29, 2018 (as may be further amended from time to time, and together with the March 26 Limited Guarantees, the "Limited Guarantees") pursuant to which such Guarantor, subject to the terms and conditions set forth therein, guaranteed in favor of the Company a portion of the payment obligations of Parent under the merger agreement for the US$74,000,000 termination fee and certain costs, expenses and indemnifiable losses that may become payable to the Company by Parent under certain circumstances as set forth in the merger agreement.

        See "Special Factors—Limited Guarantees" beginning on page 95 for additional information.

Interim Investors Agreement (Page 97)

        Concurrently with the execution and delivery of the merger agreement on March 26, 2018, the Rollover Shareholders, the Beneficial Owners, the Sponsors (other than Boyu Fund III), Holdco,

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Parent and Merger Sub entered into an interim investors agreement, dated as of March 26, 2018 (the "March 26 Interim Investors Agreement") which governs the relationship among the parties thereto with respect to the merger agreement and matters relating thereto until the consummation of the merger or earlier termination of the merger agreement. On May 29, 2018, the March 26 Interim Investors Agreement was amended and restated to admit Boyu Fund III as an investor thereunder (such amended and restated Interim Investors Agreement, as may be further amended from time to time, the "Interim Investors Agreement"). The Interim Investors Agreement provides for, among other things and subject to certain limitations or exceptions therein, (i) the mechanism for the Buyer Group to make decisions relating to the merger agreement pending consummation of the merger, (ii) the mechanism for admitting additional investors to the Buyer Group and making adjustments to the Sponsors' equity commitments pending consummation of the merger (subject to the Special Committee's prior consent), (iii) certain fees and expense sharing arrangements among the Buyer Group, and (iv) the obligations of the Founder Parties, the Mr. He Parties and the Sponsors to work exclusively with the Sponsors and Mr. Zhang to implement the transactions contemplated by the merger agreement.

Support Agreement (Annex E)

        Concurrently with the execution and delivery of the merger agreement, the Rollover Shareholders and the Beneficial Owners entered into a support agreement, dated as of March 26, 2018 (as amended on May 29, 2018, and as may be further amended from time to time, the "Support Agreement"), with Parent and Holdco, pursuant to which, upon the terms and subject to the conditions therein and among other things:

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Opinion of the Special Committee's Financial Advisor (Page 78)

        The Special Committee retained J.P. Morgan Securities (Asia Pacific) Limited ("J.P. Morgan") to act as its financial advisor and deliver a fairness opinion in connection with the merger.

        On March 26, 2018, J.P. Morgan rendered an oral opinion to the Special Committee (which was confirmed in writing by delivery of a written opinion by J.P. Morgan dated as of the same date) that, as of such date and based upon and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by J.P. Morgan in preparing its opinion, the per share merger consideration to be paid to the holders of Shares (other than holders of Excluded Shares or Dissenting Shares) in the merger, was fair, from a financial point of view, to such holders.

        The opinion of J.P. Morgan was addressed to the Special Committee and only addressed the fairness from a financial point of view of the per share merger consideration to be paid to the holders of Shares (other than holders of Excluded Shares or Dissenting Shares) in the merger, and does not address any other aspect or implication of the merger. The summary of the opinion of J.P. Morgan in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is included as Annex C to this proxy statement and sets forth the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by J.P. Morgan in preparing its opinion. We encourage the holders of Shares to read carefully the full text of the written opinion of J.P. Morgan. However, the opinion of J.P. Morgan, the summary of the opinion and the related analyses set forth in this proxy statement are not intended to be, and do not constitute advice or a recommendation to any shareholder, or holder of ADSs, of the Company as to how to act

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or vote with respect to the merger or any other matter. See "Special Factors—Opinions of the Special Committee's Financial Advisor" beginning on page 78 for additional information.

        Except for the fairness opinion delivered to the Special Committee by J.P. Morgan in connection with the merger, none of the Special Committee, the Company, or the Company's affiliates (including any affiliate of the Company who participated in Buyer Group 1 or continue to participate in the Buyer Group) received any other report, opinion, or appraisal from any outside third party materially related to the merger.

Interests of the Company's Executive Officers and Directors in the Merger (Page 98)

        In considering the recommendations of the Board, the Company's shareholders should be aware that certain of the Company's directors and executive officers have interests in the transaction that are different from, and/or in addition to, the interests of the Company's shareholders and ADS holders generally. These interests include, among others:

        As of the date of this proxy statement, Mr. Zhang, the chairman of the Board and chief executive officer of the Company, beneficially owns approximately 13.9% of the total number of issued and outstanding Shares, which represents approximately 34.8% of the total voting rights in the Company. See "Security Ownership of Certain Beneficial Owners and Management of the Company" beginning on page 147.

        As of the date of this proxy statement, Mr. He, the vice chairman of the Board, beneficially owns approximately 12.9% of the total number of issued and outstanding Shares, which represents approximately 9.7% of the total voting rights in the Company. See "Security Ownership of Certain Beneficial Owners and Management of the Company" beginning on page 147.

        The maximum amount of cash payments our directors and executive officers may receive in respect of their Company Options if the Merger is consummated is, in aggregate, approximately US$53.13 million. See "Special Factors—Interests of Certain Persons in the Merger" beginning on page 98 for additional information.

        The Special Committee and the Board were aware of these potential conflicts of interest and considered them, among other matters, in reaching their decisions and recommendations with respect to the merger agreement and related matters. See "Special Factors—Interests of Certain Persons in the Merger" beginning on page 98 for additional information.

Acquisition Proposals (Page 127)

        The merger agreement restricts the Company's ability, until the effective time of the merger or, if earlier, the termination of the merger agreement, to solicit proposals, engage in discussions or

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negotiations, provide confidential information, or enter into any agreements, in each case, regarding a competing transaction (as described in "The Merger Agreement—Acquisition Proposals").

        Notwithstanding the foregoing restrictions, if the Company receives an unsolicited, written, bona fide proposal or offer regarding a competing transaction from any person that did not result from a breach by the Company of these restrictions (other than immaterial non-compliance with does not adversely affect Parent or Merger Sub), the Company and its representatives may (a) contact and engage in discussions with such person in order to clarify and understand the terms and conditions of the proposal and to assess whether such proposal constitutes or would reasonably be expected to lead to a superior proposal (as described in "The Merger Agreement—Acquisition Proposals") and (b) furnish information to, and enter into discussions with, such person if the Board, upon the recommendation of the Special Committee, has (i) determined in its good faith judgment (after consultation with its financial advisor and independent legal counsel) that such proposal or offer constitutes or would reasonably be expected to result in a superior proposal, (ii) determined in its good faith judgment (after consultation with independent legal counsel) that, in light of such proposal or offer, failure to furnish information or enter into discussions with such person would be inconsistent with its fiduciary obligations to the Company and its shareholders under applicable law and (iii) obtained from such person an executed confidentiality agreement on terms no less favorable to the Company in the aggregate than those contained in the Confidentiality Agreement entered into by the Company, Yunfeng Capital ("Yunfeng"), Alibaba Investment Limited ("Alibaba") and certain other parties (the "Confidentiality Agreement"). See and read carefully "The Merger Agreement—Acquisition Proposals" and "The Merger Agreement—No Change of Recommendation" beginning on page 127 and page 129, respectively.

Conditions to the Merger (Page 134)

        The obligations of the Company, Parent and Merger Sub to complete the merger are subject to the satisfaction or waiver of the following conditions:

        The obligations of Parent and Merger Sub to complete the merger are also subject to the satisfaction or waiver of the following conditions:

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        The obligations of the Company to complete the merger are also subject to the satisfaction or waiver of the following conditions:

Termination of the Merger Agreement (Page 135)

        The merger agreement may be terminated at any time prior to the effective time of the merger:

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Termination Fee (Page 137)

        The Company is required to pay to Parent a cash termination fee in an amount equal to US$37,000,000 if the merger agreement is terminated by:

        Parent is required to pay to the Company a cash termination fee in an amount equal to US$74,000,000 if the merger agreement is terminated by the Company pursuant to:

Material PRC Income Tax Consequences (Page 105)

        The Company does not believe that it should be considered a resident enterprise under the PRC Enterprise Income Tax Law (the "EIT Law") or that the gains recognized on the receipt of cash for the Shares or ADSs should otherwise be subject to PRC tax to holders of such Shares or ADSs that are not PRC residents. However, there is uncertainty regarding whether the PRC tax authorities would deem the Company to be a resident enterprise. If the PRC tax authorities were to determine that the Company should be considered a resident enterprise, then gains recognized on the receipt of cash for our Shares or ADSs pursuant to the merger by our shareholders or ADSs holders who are not PRC residents could be treated as PRC-source income that would be subject to PRC income tax at a rate of 10% in the case of enterprises or 20% in the case of individuals (subject to applicable tax treaty relief, if any), and, even in the event that the Company is not considered a resident enterprise, gains recognized on the receipt of cash for Shares or ADSs will be subject to PRC tax if the holders of such

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Shares or ADSs are PRC residents. You should consult your own tax advisor for a full understanding of the tax consequences of the merger to you, including any PRC tax consequences.

        Please see "Special Factors-Material PRC Income Tax Consequences" beginning on page 105 for additional information.

Material Cayman Islands Tax Consequences (Page 106)

        The Cayman Islands currently has no form of income, corporate or capital gains tax and no estate duty, inheritance tax or gift tax. No taxes, fees or charges will be payable (either by direct assessment or withholding) to the government or other taxing authority in the Cayman Islands under the laws of the Cayman Islands in respect of the merger or the receipt of cash for the Shares and ADSs under the terms of the merger agreement. This is subject to the qualifications that (a) Cayman Islands stamp duty may be payable if any original transaction documents are brought into or executed or produced before a court in the Cayman Islands (for example, for enforcement), (b) registration fees will be payable to the Cayman Registrar to register the plan of merger and to file the variation of capital and the amendment of the M&A and (c) fees will be payable to the Cayman Islands Government Gazette Office to publish the notice of the merger in the Cayman Islands Government Gazette.

Material U.S. Federal Income Tax Consequences (Page 106)

        For a U.S. Holder (as defined under "Special Factors—Material U.S. Federal Income Tax Consequences), the receipt of cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes and may also be a taxable transaction under applicable state, local and other tax laws. Please see "Special Factors Material U.S. Federal Income Tax Consequences" beginning on page 103 for additional information. The U.S. federal income tax consequences of the merger to you will depend upon your personal circumstances. You should consult your tax advisors for a full understanding of the U.S. federal, state, local, non-U.S. and other tax consequences of the merger to you.

Regulatory Matters (Page 104)

        The Company does not believe that any material federal or state regulatory approvals, filings or notices are required in connection with the merger other than the approvals, filings or notices required under the federal securities laws, any approvals, filings or notices which may apply under applicable PRC laws, and the filing of the plan of merger (and supporting documentation as specified in the Cayman Islands Companies Law) with the Cayman Registrar and, in the event the merger becomes effective, a copy of the certificate of merger being given to the shareholders and creditors of the Company and Merger Sub as at the time of the filing of the plan of merger and notice of the merger being published in the Cayman Islands Government Gazette.

Litigation Relating to the Merger (Page 104)

        We are not aware of any lawsuit that challenges the merger, the merger agreement or any of the transactions contemplated thereby, including the merger.

Accounting Treatment of the Merger (Page 104)

        The merger is expected to be accounted for as a business combination by Parent in accordance with Accounting Standards Codification 805 "Business Combinations," initially at the fair value of the Company as of the date of the closing of the merger, which is the date of the acquisition.

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Market Price of the ADSs (Page 109)

        The closing price of ADSs on NASDAQ on March 9, 2018, the last trading date immediately prior to the Company's announcement on March 12, 2018 that it had received a going-private proposal from Yunfeng and Alibaba, was US$17.92 per ADS. The consideration of US$20.60 per ADS to be paid in the merger represents a premium of approximately 15.0% over that closing price, and a premium of 24.7% and 28.5%, respectively, over the Company's 30 and 60 trading day volume-weighted average price as quoted by NASDAQ through March 9, 2018.

Fees and Expenses (Page 103)

        Whether or not the merger is completed, all costs and expenses incurred in connection with the merger agreement and the transactions contemplated thereby will be paid by the party incurring such costs and expenses, except as otherwise provided in the merger agreement and the Interim Investors Agreement.

Remedies and Limitations on Liability (Page 137)

        The parties to the merger agreement are entitled to an injunction or injunctions to prevent breaches of the merger agreement and to enforce specifically the terms and provisions thereof against the Company, which remedies are in addition to any other remedy to which they are entitled at law or in equity, subject to certain limitations as described under "The Merger Agreement—Remedies and Limitations on Liability" beginning on page 137.

        In the event that Parent or Merger Sub fails to consummate the closing of the merger or otherwise breaches the merger agreement or fails to perform thereunder, the Company has the right to receive payment of a termination fee equal to US$74,000,000 from Parent as well as certain costs and expenses payable pursuant to the merger agreement. The Company has the right to directly enforce the Limited Guarantee provided by each of the Guarantors which guarantees to the Company the payment of such Guarantor's share of the Parent termination fee and such costs and expenses in the event that Parent fails to pay these amounts to the Company when due.

        While the Company, Parent and Merger Sub may pursue both a grant of specific performance and payment of a termination fee, none of them will be permitted or entitled to receive both a grant of specific performance that results in the closing of the merger and payment of a termination fee.

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QUESTIONS AND ANSWERS ABOUT THE EXTRAORDINARY GENERAL MEETING AND THE MERGER

        The following questions and answers address briefly some questions you may have regarding the extraordinary general meeting and the merger. These questions and answers may not address all questions that may be important to you as a shareholder of the Company. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement.

Q:
Why am I receiving this proxy statement?

A:
On March 26, 2018, we entered into the merger agreement with Parent and Merger Sub. You are receiving this proxy statement in connection with the solicitation of proxies by the Board in favor of the proposal to authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, at an extraordinary general meeting or at any adjournment of such extraordinary general meeting.

Q:
When and where will the extraordinary general meeting be held?

A:
The extraordinary general meeting will take place on                , 2018, at                 (Beijing time) at B-6F, Shimao Tower, 92A Jianguo Road, Chaoyang District, Beijing, the PRC.

Q:
What am I being asked to vote on?

A:
You will be asked to consider and vote on the following proposals:

(a)
as a special resolution, to authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, and, upon the merger becoming effective, the variation of capital and the amendment of the M&A;

(b)
as a special resolution, to authorize each director and officer of the Company to do all things necessary to give effect to the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger; and

(c)
if necessary, as an ordinary resolution, to adjourn the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting.

Q:
What is the merger?

A:
The merger is a going-private transaction pursuant to which Merger Sub will merge with and into the Company. Once the merger agreement and the plan of merger are authorized and approved by the shareholders of the Company and the other closing conditions under the merger agreement have been satisfied or waived, and the plan of merger is registered with the Cayman Registrar, Merger Sub will merge with and into the Company, with the Company continuing as the surviving company after the merger. If the merger is completed, the Company will be a privately held company beneficially owned by the Sponsors and the Rollover Shareholders, and as a result of the merger, the ADSs will no longer be listed on NASDAQ and the Company's ADS program will terminate, and the Company will cease to be an independent publicly traded company.

Q:
What will I receive in the merger if I own Shares or ADSs (that are not Excluded Shares)?

A:
If you own Shares and the merger is completed, at the effective time of the merger, you will be entitled to receive US$41.20 per Share, in cash, without interest and net of any applicable

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Q:
How will the Company Options be treated in the merger?

A:
If the merger is completed, at the effective time of the merger, each Company Option (whether vested or unvested) will be cancelled in exchange for the right to receive, as soon as practicable after the effective time of the merger, an amount in cash (without interest) equal to the product of (a) the total number of Shares issuable under such Company Option immediately prior to the effective time of the merger multiplied by (b) the excess of US$41.20 over the exercise price payable per Share under such Company Option. If the exercise price payable per Share under any Company Option is greater than US$41.20, such Company Option will be cancelled for no consideration. In addition, certain Company Options held by certain Rollover Shareholders or their affiliates will be cancelled for no consideration in connection with the merger as further described under "Special Factors—Interests of Certain Persons in the merger" beginning on page 98.

Q:
What effects will the merger have on the Company?

A:
As a result of the merger, the Company will cease to be an independent publicly traded company and will instead become a private company beneficially owned by the Sponsors and the Rollover Shareholders. You will no longer have any interest in the future earnings or growth of the Company. Following the completion of the merger, the registration of the Shares and ADSs and the Company's reporting obligations with respect to the Shares and ADSs under the Exchange Act will be terminated upon application to the SEC. In addition, upon the completion of the merger, the ADSs will no longer be listed or traded on any stock exchange, including NASDAQ, and the Company's ADS program will terminate.

Q:
When do you expect the merger to be consummated?

A:
We are working towards completing the merger as quickly as possible and currently expect the merger to close during the third quarter of 2018, after all conditions to the merger have been

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Q:
What happens if the merger is not consummated?

A:
If the Company's shareholders do not authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, or if the merger is not completed for any other reason, the Company's shareholders will not receive any payment for their Shares or ADSs pursuant to the merger agreement, nor will the holders of any Company Options receive any payment pursuant to the merger agreement. In addition, the Company will remain a publicly traded company. The ADSs will continue to be listed and traded on NASDAQ, provided that the Company continues to meet NASDAQ's listing requirements. In addition, the Company will remain subject to SEC reporting obligations. Therefore, the Company's shareholders and ADS holders will continue to be subject to similar risks and opportunities as they currently are with respect to their ownership of Shares and ADSs.

Under specified circumstances in which the merger agreement is terminated, the Company may be required to pay Parent a termination fee in an amount equal to US$37,000,000, or Parent may be required to pay the Company a termination fee in an amount equal to US$74,000,000, in each case, as described in "The Merger Agreement—Termination Fee" beginning on page 137.

Q:
After the merger is consummated, how will I receive the merger consideration for my Shares?

A:
If you are a registered holder of Shares, promptly after the effective time of the merger, a paying agent appointed by Parent will mail you (a) a form of letter of transmittal specifying how the delivery of the merger consideration to you will be effected and (b) instructions for effecting the surrender of any issued share certificates representing Shares (or affidavits and indemnities of loss in lieu of share certificates) or non-certificated Shares represented by book entry in exchange for the applicable merger consideration.

Unless you validly exercise and have not effectively withdrawn or lost your dissenters' rights in accordance with Section 238 of the Cayman Islands Companies Law, upon your surrender of the share certificates (or an affidavit and indemnity of loss in lieu of the share certificates), if applicable, and/or such other documents as may be required by the paying agent in accordance with the terms of such letter of transmittal, duly executed in accordance with the instructions thereto, you will receive an amount equal to (i) the number of your Shares (excluding the Excluded Shares and the Dissenting Shares) represented by such share certificate (or affidavits and indemnities of loss in lieu of share certificates) or the number of your non-certificated Shares, multiplied by (ii) US$41.20 per Share, in cash, without interest and net of any applicable withholding taxes, in exchange for the cancellation of your Shares (excluding the Excluded Shares and the Dissenting Shares).

The merger consideration payable in the merger may be subject to withholding taxes, including if the paying agent has not received from you a properly completed and signed U.S. Internal Revenue Service Form W-8 or W-9, as applicable.

If your Shares are held in "street name" by your broker, bank or other nominee, you will receive instructions from your broker, bank or other nominee on how to surrender your Shares and receive the merger consideration for those Shares.

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Q:
After the merger is consummated, how will I receive the merger consideration for my ADSs?

A:
If you are a registered holder of ADSs that are evidenced by certificates, also referred to as American depositary receipts ("ADRs"), unless you have surrendered your ADRs to the ADS depositary for cancellation prior to the effective time of the merger, upon your surrender of the ADRs (or an affidavit and indemnity of loss in lieu of the ADRs) together with a duly completed letter of transmittal (which will be supplied to you by the ADS depositary after the effective time of the merger), the ADS depositary will send you a check for US$20.60 per ADS, without interest and net of any applicable withholding taxes, for each ADS represented by the ADRs, in exchange for the cancellation of your ADRs after the completion of the merger.

In the event of a transfer of ownership of Shares that is not registered in the register of members of the Company, a check for any cash to be exchanged upon cancellation of the ADSs will be issued to such transferee if the ADRs are presented to the ADS depositary, accompanied by all documents reasonably required to evidence and effect such transfer and to evidence that any applicable ADS transfer taxes have been paid or are not applicable.

The per ADS merger consideration may be subject to backup withholding taxes if the ADS depositary has not received from you a properly completed and signed U.S. Internal Revenue Service Form W-8 or W-9, as applicable.

If your ADSs are held in "street name" by your broker, bank or other nominee, you will not be required to take any action to receive the merger consideration for your ADSs as the ADS depositary will arrange for the surrender of the ADSs and the remittance of the merger consideration with The Depository Trust Company (the clearance and settlement system for the ADSs) for distribution to your broker, bank or other nominee on your behalf. If you have any questions concerning the receipt of the merger consideration, please contact your broker, bank or other nominee.

Q:
What vote of the Company's shareholders is required to authorize and approve the merger agreement and the plan of merger?

A:
In order for the merger to be consummated, the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, must be authorized and approved by a special resolution (as defined in the Cayman Islands Companies Law) of the Company's shareholders, which requires an affirmative vote of holders of Shares representing two-thirds or more of the voting rights of Shares present and voting in person or by proxy as a single class at the extraordinary general meeting.

Each of the Rollover Shareholders has agreed, upon the terms and subject to the conditions of the Support Agreement, (i) to vote any and all of their Shares in favor of the authorization and approval of the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger; (ii) to receive no cash consideration with respect to the Rollover Shares; and (iii) to subscribe for newly issued shares of Holdco immediately prior to the closing of the merger. As of the date of this proxy statement, the Rollover Shareholders collectively beneficially own an aggregate of 9,332,946 Shares representing, in the aggregate, approximately 26.6% of the total issued and outstanding Shares and approximately 44.4% of the total voting power of the total issued and outstanding Shares.

Assuming the Rollover Shareholders comply with their voting undertakings under the Support Agreement, based on the number of Shares expected to be issued and outstanding and entitled to vote as of the close of business in the Cayman Islands on the Share record date, in order for the proposal to be authorized and approved, assuming all issued and outstanding Shares expected to be issued and outstanding and entitled to vote at the meeting are present in person or by proxy

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Q:
What vote of the Company's shareholders is required to approve the proposal to adjourn the extraordinary general meeting, if necessary, to solicit additional proxies?

A:
The proposal to adjourn the extraordinary general meeting, if necessary, to solicit additional proxies must be authorized and approved by an affirmative vote of holders of Shares representing a majority of the voting rights of the Shares present and voting in person or by proxy as a single class at the extraordinary general meeting.

Q:
How does the Board recommend that I vote on the proposals?

A:
After careful consideration and upon the unanimous recommendation of the Special Committee and after each director duly disclosed his or her interests in the transactions contemplated by the merger agreement, including the merger, as required by the memorandum and articles of associations of the Company as amended to date and the laws of the Cayman Islands, the Board recommends that you vote:

FOR the proposal to authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement and the plan of merger, including the merger, and, upon the merger becoming effective, the variation of capital and the amendment of the M&A;

FOR the proposal to authorize each director and officer of the Company to do all things necessary to give effect to the merger agreement, the plan of merger and the transactions contemplated by the merger agreement and the plan of merger, including the merger; and

FOR the proposal to adjourn the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting.

You should read "Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board" beginning on page 64 for a discussion of the factors that the Special Committee and the Board considered in deciding to recommend the approval of the merger agreement. In addition, in considering the recommendation of the Special Committee and the Board with respect to the merger agreement, you should be aware that some of the Company's directors and executive officers have interests in the merger that are different from, and/or in addition to, the interests of the Company's shareholders generally. See "Special Factors—Interests of Certain Persons in the Merger" beginning on page 98.

Q:
Who is entitled to vote at the extraordinary general meeting?

A:
The Share record date is            , 2018. Only shareholders entered in the register of members of the Company at the close of business in the Cayman Islands on the Share record date or their proxy holders are entitled to vote at the extraordinary general meeting or any adjournment thereof. The ADS record date is            , 2018. Only ADS holders of the Company at the close of business in New York City on the ADS record date are entitled to instruct the ADS depositary to vote at the extraordinary general meeting. Alternatively, you may vote at the extraordinary general meeting if you do not vote the ADSs and convert your ADSs into Shares by the close of business

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Q:
What constitutes a quorum for the extraordinary general meeting?

A:
One or more shareholders present in person or by proxy or corporate representative representing at least one third of the outstanding voting shares in the capital of the Company will constitute a quorum for the extraordinary general meeting.

Q:
How will our directors and executive officers vote on the proposal to authorize and approve the merger agreement?

A:
Each of the Rollover Shareholders has agreed to vote all of their Shares in favor of the authorization and approval of the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger. Mr. Boquan He, the vice chairman of the Board, his holding company which holds Shares beneficially owned by him, and certain holding companies which hold Shares beneficially owned by Mr. Lee Ligang Zhang, the chairman of the Board and the chief executive officer of the Company, are Rollover Shareholders. As of the date of this proxy statement, Mr. Zhang and Mr. He collectively beneficially own an aggregate of 9,332,946 Shares representing, in the aggregate, approximately 26.6% of the total issued and outstanding Shares and approximately 44.4% of the total voting power of the total issued and outstanding Shares.

In addition, each of our directors who beneficially owns Shares (including Shares represented by ADSs), other than Mr. Zhang and Mr. He, has informed us that, as of the date of this proxy statement, he or she intends to vote all of his or her Shares in favor of approval and authorization of the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger. As of the date of this proxy statement, our directors and executive officers, other than Mr. Zhang and Mr. He, collectively beneficially own, in the aggregate, 1,548,783 Shares, which consist of (a) 897,033 issued and outstanding Shares and (b) issued and unexercised Company Options to purchase 651,750 Shares issued pursuant to the Share Incentive Plan and exercisable within 60 days following the date of this proxy statement, which in aggregate represent approximately 4.4% of the total issued and outstanding Shares. See "Security Ownership of Certain Beneficial Owners and Management of the Company" beginning on page 147 for additional information.

Q:
Do any of the Company's directors or executive officers have interests in the merger that may differ from those of other shareholders?

A:
Yes. Some of the Company's directors or executive officers have interests in the merger that may differ from those of other shareholders. See "Special Factors—Interests of Certain Persons in the Merger" beginning on page 98 for a more detailed discussion of how some of the Company's directors and executive officers have interests in the merger that are different from, and/or in addition to, the interests of the Company's shareholders generally. The Special Committee considered these interests in the merger in its evaluation of the transactions contemplated by the merger agreement, and you should carefully review this disclosure.

Q:
How do I vote if my Shares are registered in my name?

A:
If Shares are registered in your name (that is, you do not hold ADSs or otherwise hold through a bank or broker) as of the Share record date, you should simply indicate on your proxy card how you want to vote, and sign and mail your proxy card in the accompanying return envelope as soon as possible so that it is received by the Company no later than             , 2018 at             a.m.

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Q:
How do I vote if I own ADSs?

A:
If you own ADSs as of the close of business in New York City on the ADS record date (and do not convert such ADSs and become a registered holder of the Shares underlying your ADSs as explained below), you cannot vote at the extraordinary general meeting directly, but you may instruct the ADS depositary (as the holder of Shares underlying your ADSs) how to vote the Shares underlying your ADSs by completing and signing the ADS voting instruction card and returning it in accordance with the instructions printed on it as soon as possible. The ADS depositary must receive such instructions no later than             a.m. (New York City time) on            , 2018 in order to ensure the Shares underlying your ADSs are properly voted at the extraordinary general meeting. The ADS depositary will endeavor to vote (or will endeavor to cause the vote of) the Shares it holds on deposit at the extraordinary general meeting in accordance with the voting instructions timely received from holders of ADSs. If the ADS depositary timely receives voting instructions from an ADS holder which fail to specify the manner in which the ADS depositary is to vote the Shares represented by the holder's ADS, the ADS depositary has advised the Company that it will not vote or attempt to exercise the right to vote any Shares underlying such holder's ADSs. If you hold your ADSs in a brokerage, bank or other nominee account, you must rely on the procedures of the broker, bank or other nominee through which you hold your ADSs if you wish to vote.

Alternatively, if you own ADSs as of the close of business in New York City on the ADS record date, you may vote at the extraordinary general meeting directly if you convert your ADSs and become a holder of the Shares underlying your ADSs prior to the close of business in the Cayman Islands on the Share record date. If you wish to convert your ADSs for the purpose of voting the corresponding Shares, you need to make arrangements to deliver your ADSs to the ADS depositary for cancellation before the close of business in New York City on            , 2018 together with (a) delivery instructions for the corresponding Shares (name and address of person who will be the registered holder of such Shares), (b) payment of the ADS cancellation fees ($0.05 for each ADS (or portion thereof) to be cancelled pursuant to the terms of the Deposit Agreement), which will not be borne by the surviving company, and any applicable taxes, and (c) a certification that

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Q:
If my Shares or ADSs are held in a brokerage, bank or other nominee account, will my broker, bank or other nominee vote my Shares or ADSs on my behalf?

A:
Your broker, bank or other nominee will only vote your Shares on your behalf or give voting instructions with respect to the Shares underlying your ADSs if you instruct it how to vote. Therefore, it is important that you promptly follow the directions provided by your broker, bank or other nominee regarding how to instruct it to vote your Shares or ADSs. If you do not instruct your broker, bank or other nominee how to vote your Shares that it holds, those Shares or ADSs may not be voted.

Q:
What will happen if I abstain from voting or fail to vote on the proposal to authorize and approve the merger agreement?

A:
If you abstain from voting, fail to cast your vote in person, fail to return your proxy card in accordance with the instructions set forth on the proxy card, or fail to give voting instructions to the ADS depositary, your broker, bank, or other nominee, your vote will not be counted; provided that if you are a holder of Shares and submit a signed proxy card without indicating how you wish to vote, the Shares represented by your proxy card will be voted (1) FOR the proposal to authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement and the plan of merger, including the merger, and, upon the merger becoming effective, the variation of capital and the amendment of the M&A, (2) FOR the proposal to authorize each director and officer of the Company to do all things necessary to give effect to the merger agreement, the plan of merger and the transactions contemplated by the merger agreement and the plan of merger, including the merger, and (3) FOR the proposal to adjourn the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting, unless you appoint a person other than the chairman of the meeting as proxy, in which

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Q:
May I change my vote?

A:
Yes. If you are a holder of Shares, you may change your vote in one of the following three ways:

First, you may revoke a proxy by written notice of revocation given to the chairman of the extraordinary general meeting before the commencement of the extraordinary general meeting. Any written notice revoking a proxy should also be sent to the Company's offices at B-6F, Shimao Tower, 92A Jianguo Road, Chaoyang District, Beijing, 100022, the PRC, Attention: Investor Relations Department, before the commencement of the extraordinary general meeting.

Second, you may complete, date and submit a new proxy card bearing a later date than the proxy card sought to be revoked to the Company so that it is received by the Company no later than 12:00 p.m. (Beijing time) on            , 2018, which is the deadline to lodge your proxy card.

Third, you may attend the extraordinary general meeting and vote in person. Attendance, by itself, will not revoke a proxy. It will only be revoked if the shareholder actually votes at the extraordinary general meeting.

If you hold Shares through a broker, bank or other nominee and have instructed the broker, bank or other nominee to vote your Shares, you must follow directions received from the broker, bank or other nominee to change your instructions.

Holders of ADSs may revoke their voting instructions by notification to the ADS depositary in writing at any time prior to 12:00 p.m. (New York City time) on            , 2018. A holder of ADSs can do this by completing, dating and submitting a new ADS voting instruction card to the ADS depositary bearing a later date than the ADS voting instruction card sought to be revoked.

If you hold your ADSs through a broker, bank or other nominee and you have instructed your broker, bank or other nominee to give ADS voting instructions to the ADS depositary, you must follow the directions of your broker, bank or other nominee to change those instructions.

Q:
What should I do if I receive more than one set of voting materials?

A:
You may receive more than one set of voting materials, including multiple copies of this proxy statement or multiple proxy or voting instruction cards. For example, if you hold your Shares or ADSs in more than one brokerage, bank or other nominee account, you will receive a separate voting instruction card for each brokerage, bank or other nominee account in which you hold Shares or ADSs. If you are a holder of record and your Shares or ADSs are registered in more than one name, you will receive more than one proxy or voting instruction card. Please submit each proxy card that you receive.

Q:
If I am a holder of certificated Shares or ADSs, should I send in my Share certificates or my ADSs now?

A:
No. After the merger is consummated, you will be sent a form of letter of transmittal with detailed written instructions for exchanging your Share certificates for the merger consideration. Please do not send in your Share certificates now. Similarly, you should not send in the ADRs that represent your ADSs at this time. Promptly after the merger is consummated, the ADS depositary will call for the surrender of all ADRs for delivery of the merger consideration. ADS holders will be receiving a similar form of letter of transmittal and written instructions from the ADS depositary relating to the foregoing.

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Q:
What happens if I sell my Shares or ADSs before the extraordinary general meeting?

A:
The Share record date for voting at the extraordinary general meeting is earlier than the date of the extraordinary general meeting and the date that the merger is expected to be consummated. If you transfer your Shares after the Share record date for voting but before the extraordinary general meeting, you will retain your right to vote at the extraordinary general meeting unless you have given, and not revoked, a proxy to the person to whom you transfer your Shares, but will transfer the right to receive the merger consideration to such person, so long as such person is registered as the owner of such Shares when the merger is consummated.

The ADS record date is the close of business in New York City on            , 2018. If you transfer your ADSs after the ADS record date but before the extraordinary general meeting, you will retain your right to instruct the ADS depositary to vote at the extraordinary general meeting, but will transfer the right to receive the merger consideration to the person to whom you transfer your ADSs, so long as such person owns such ADSs when the merger is consummated.

Q:
Am I entitled to dissenters' rights?

A:
Shareholders who dissent from the merger will have the right to receive payment of the fair value of their Shares in accordance with Section 238 of the Cayman Islands Companies Law if the merger is consummated, but only if they deliver to the Company, before the vote to authorize and approve the merger is taken at the extraordinary general meeting, a written objection to the merger and subsequently comply with all procedures and requirements of Section 238 of the Cayman Islands Companies Law for the exercise of dissenters' rights, a copy of which is attached as Annex C to this proxy statement. The fair value of each of their Shares as determined under the Cayman Islands Companies Law could be more than, the same as, or less than the per share merger consideration they would receive pursuant to the merger agreement if they do not exercise dissenters' rights with respect to their Shares.

ADS holders will not have the right to exercise dissenters' rights and receive payment of the fair value of the Shares underlying their ADSs. The ADS depositary will not exercise or attempt to exercise any dissenters' rights with respect to any of the Shares that it holds, even if an ADS holder requests the ADS depositary to do so. ADS holders wishing to exercise dissenters' rights must, before             p.m. (New York City Time) on            , 2018, surrender their ADSs to the ADS depositary for conversion into Shares, pay the ADS depositary's fees required for the cancellation of their ADSs, and provide instructions for the registration of the corresponding Shares in the Company's register of members, and certify that they hold the ADSs as of the ADS record date and have not given, and will not give, voting instructions as to their ADSs and become registered holders of Shares by the close of business in the Cayman Islands on the Share record date. Thereafter, such former ADS holders must comply with the procedures and requirements for exercising dissenters' rights with respect to the Shares under Section 238 of the Cayman Islands Companies Law. If the merger is not consummated, the Company will continue to be a public company in the United States and ADSs will continue to be listed on NASDAQ. Shares are not listed and cannot be traded on any stock exchange other than NASDAQ, and in such case only in

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Q:
What do I need to do now?

A:
We urge you to read this proxy statement carefully, including its annexes, exhibits, attachments and the other documents referred to or incorporated by reference herein and to consider how the merger affects you as a shareholder. After you have done so, please vote as soon as possible.

Q:
Will any proxy solicitors be used in connection with the extraordinary general meeting?

A:
Yes. To assist in the solicitation of proxies, the Company has engaged            as its proxy solicitor.

Q:
Who can help answer my questions?

A:
If you have any questions about the merger or if you need additional copies of this proxy statement or the accompanying proxy card, you should contact             , the proxy solicitor at            , or by email at            .

        In order for you to receive timely delivery of any additional copy of this proxy statement or the accompanying proxy card in advance of the extraordinary general meeting, you must make your request no later than ten days prior to the date of the extraordinary general meeting.

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SPECIAL FACTORS

Background of the Merger

        Events leading to the execution of the merger agreement described in this Background of the Merger occurred primarily in the PRC and Hong Kong. As a result, China Standard Time is used for all dates and times given.

        The board of directors and senior management of the Company have periodically reviewed the Company's long-term strategic plan with the goal of maximizing shareholder value. As part of this ongoing process, the board of directors and senior management of the Company also have periodically reviewed strategic alternatives that may be available to the Company.

        On August 31, 2015, the Company received from Mr. Zhang, certain affiliates of Mr. Zhang and FV Investment Holdings (collectively, "Buyer Group 1") a non-binding proposal letter that proposed a "going-private" transaction to acquire all of the Class A Shares not already owned by Buyer Group 1 for US$17.80 per ADS or US$35.60 per Share in cash (such proposal, the "Buyer Group 1 Proposal", and such proposed transaction, the "Buyer Group 1 Proposed Transaction"). On the same day, the Company issued a press release announcing the receipt of the Buyer Group 1 Proposal and stating its intention to form a special committee consisting of independent directors to consider the Buyer Group 1 Proposal. The Company furnished such press release and the Buyer Group 1 Proposal as exhibits to a Current Report on Form 6-K.

        On September 9, 2015, the Board held a telephonic meeting to discuss the Buyer Group 1 Proposal. The Board discussed the formation of a special committee of independent directors to consider, review and evaluate the Buyer Group 1 Proposal and resolved that Ms. Ruby Lu ("Ms. Lu"), Mr. Daqing Qi ("Mr. Qi") and Mr. Gavin Zhengdong Ni ("Mr. Ni") be appointed as members of the Special Committee, with Ms. Lu serving as the chairperson of the Special Committee. On September 10, 2015, the Company issued a press release regarding the formation of the Special Committee to consider the Buyer Group 1 Proposal and furnished the press release to the SEC as an exhibit to a Current Report on Form 6-K.

        In connection with establishing the Special Committee, the Board adopted resolutions that delegated to the Special Committee the power to (i) make such investigation of the Buyer Group 1 Proposal and any matters relating thereto as the Special Committee deemed appropriate, (ii) evaluate the terms of the Buyer Group 1 Proposal, (iii) discuss and negotiate with Buyer Group 1 the proposed terms of the Buyer Group 1 Proposed Transaction, (iv) explore and pursue any alternatives to the Buyer Group 1 Proposed Transaction as the Special Committee deemed appropriate, including maintaining the Company's current status as a public company or a potential change of control transaction involving an alternative buyer, (v) negotiate definitive agreements with respect to the Buyer Group 1 Proposed Transaction or any alternative transaction, (vi) report to the Board the recommendations and conclusions of the Special Committee with respect to the Buyer Group 1 Proposed Transaction or any alternative transaction, and (vii) retain advisors to the Special Committee.

        On September 21, 2015, the Company and Buyer Group 1 entered into a non-disclosure agreement which included, among other provisions, customary standstill provisions pursuant to which Buyer Group 1 agreed that it would not acquire or agree, offer, seek or propose to acquire, ownership of any assets or businesses of the Company or any securities issued by the Company.

        In September and October 2015, after considering proposals from several prospective international legal counsels and financial advisors, the Special Committee engaged Simpson Thacher to act as its international legal counsel and J.P. Morgan to act as its financial advisor. Thereafter, the Special Committee engaged Walkers to serve as its Cayman legal counsel.

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        In late September 2015, Buyer Group 1 and its advisors were granted access to due diligence materials provided by the Company and began their due diligence review of the Company.

        On November 2, 2015, the Special Committee held a telephonic meeting, attended by representatives of J.P. Morgan, representatives of Simpson Thacher and representatives of Walkers. During the meeting, representatives of Walkers reviewed with the Special Committee the duties of the members of the Special Committee under Cayman Islands law, and representatives of Simpson Thacher and representatives of J.P. Morgan provided an overview of certain procedural matters in connection with the Special Committee's evaluation of the Buyer Group 1 Proposed Transaction.

        On November 18, 2015, representatives of the Company, representatives of Simpson Thacher and representatives of J.P. Morgan met telephonically to discuss the Special Committee's process for evaluating the Buyer Group 1 Proposal and the assistance it would require from the management and finance teams of the Company, including assistance with Buyer Group 1's due diligence investigation and the preparation of the Company's financial projections.

        On November 29, 2015, the Board received a preliminary non-binding proposal letter from Jiangsu Sanyou Group Co., Ltd. (now known as Meinian Onehealth Healthcare Holdings, Co., Ltd., "Meinian"), Cathay Capital Private Equity SAS ("Cathay"), Shenzhen Ping An Decheng Investment Co., Ltd. ("Ping An"), Taiping Guofa (Suzhou) Capital Management Co., Ltd. ("Taiping"), Sequoia China Investment Management LLP ("Sequoia") and Huatai Ruilian Fund Management Co., Ltd. ("Huatai Ruilian," and together with Meinian, Cathay, Ping An, Taiping and Sequoia, "Buyer Group 2"), that proposed a "going-private" transaction in which Buyer Group 2 would acquire all of the outstanding Shares and ADS in an all-cash transaction for US$22.00 per ADS or US$44.00 per Share (such proposal, the "Buyer Group 2 Proposal" and such proposed transaction, the "Buyer Group 2 Proposed Transaction").

        On November 30, 2015, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. The Special Committee discussed, among other matters, its duty to conduct a good faith evaluation of the Buyer Group 2 Proposed Transaction and the Buyer Group 1 Proposed Transaction as well as concerns about the feasibility of the Buyer Group 2 Proposed Transaction and the genuineness of the Buyer Group 2 Proposal, noting that Mr. Zhang, who held Shares representing over one-third of the total voting power in the Company, was unlikely to support the Buyer Group 2 Proposed Transaction given the Buyer Group 1 Proposal and the fact that Meinian is the Company's primary competitor. The Special Committee also discussed whether it would be advisable to adopt a "poison pill" in order to ensure that both Buyer Group 1 and Buyer Group 2 would abide by the process and procedures determined by the Special Committee which were designed to allow the Special Committee to duly conduct its evaluation of the competing proposals the Company had received as well as other strategic alternatives of the Company. The Special Committee determined that it would further assess the genuineness of Buyer Group 2's interests, obtain further details about the Buyer Group 2 Proposal (including Buyer Group 2's strategy for obtaining shareholder support), and negotiate a non-disclosure agreement with Buyer Group 2 as soon as possible.

        On the same day, the Company issued a press release announcing the receipt of the Buyer Group 2 Proposal and furnished the press release as an exhibit to a current report on Form 6-K.

        On December 1, 2015, representatives of Simpson Thacher and representatives of J.P. Morgan held a teleconference with representatives of Huatai Securities ("Huatai"), the financial advisor to Buyer Group 2, and representatives of O'Melveny & Myers ("OMM"), international legal counsel to Buyer Group 2, to discuss additional information regarding the Buyer Group 2 Proposal. During the call, representatives of OMM explained that Buyer Group 2 was unwilling to enter into any standstill provisions that would restrict Buyer Group 2's ability to acquire any Shares or ADS or take any other "hostile" actions which were restricted by the proposed standstill provisions. Following this discussion,

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J.P. Morgan sent to Huatai and OMM a requested form of confidentiality agreement, which included standstill provisions, to be entered into by Buyer Group 2, as well as a list of information request regarding the Buyer Group 2 Proposed Transaction.

        On the same day, the Company engaged Sullivan & Cromwell ("S&C") to assist the Board and the Company's management in considering the possible adoption of a poison pill as well as to generally assist the Company in connection with the Buyer Group 1 Proposal and the Buyer Group 2 Proposal. Representatives of J.P. Morgan, representatives of the Company's management team and representatives of S&C held a teleconference to discuss the Buyer Group 2 Proposed Transaction, during which representatives of the Company's management team expressed concern regarding disclosure of the Company's confidential information in connection with an acquisition proposal from a direct competitor of the Company who was unwilling to agree to any standstill provisions.

        During the evening of December 1, 2015, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. Representatives of J.P. Morgan and Simpson Thacher reviewed with the Special Committee the feedback received from Huatai, OMM and the Company's management regarding the Buyer Group 2 Proposal. The Special Committee discussed, among other considerations, its concerns regarding potentially "hostile" or other actions which could disrupt the Special Committee's evaluation process, and noted that a poison pill would apply equally to prevent future Share or ADS acquisitions or other "hostile" actions by both existing buyer groups as well as any future buyer groups. The Special Committee directed representatives of Simpson Thacher to continue to try to persuade Buyer Group 2 to agree to customary standstill provisions, which were the same as those agreed by Buyer Group 1, and agreed that it would revisit the possibility of adopting a poison pill if Buyer Group 2 continued to refuse to enter into customary standstill provisions.

        Later in the evening of December 1, 2015, the Board held a telephonic meeting at which representatives of S&C and representatives of Conyers Dill & Pearman ("Conyers"), Cayman counsel to the Company, were present. The Board discussed the Buyer Group 2 Proposal and expressed concern that Buyer Group 2 may acquire shares of the Company on the open-market and in privately negotiated transactions, potentially leading to Buyer Group 2 holding a blocking position in the Company and thereby adversely impacting the ability of the Special Committee to conduct a process to consider a potential change of control transaction involving the Company, other strategic alternatives or certain capital market transactions. The Board also discussed, among other matters, that a poison pill would prevent Mr. Zhang from increasing his stake in the Company and prevent Buyer Group 1 from taking any "hostile" actions to further the Buyer Group 1 Proposal. The members of the Special Committee updated the Board regarding the refusal by Buyer Group 2 to agree to the same standstill obligations which had been agreed by Buyer Group 1. Following discussion, the Board instructed S&C to prepare a draft of a shareholders rights agreement for the Company (the "Rights Agreement") that would ensure that the Special Committee retained control over any process to consider a potential change of control transaction involving the Company and other potential strategic alternatives of the Company, and agreed to reconvene to consider the implementation of such Rights Agreement if the Special Committee was unable to reach agreement with Buyer Group 2 regarding standstill obligations.

        Throughout the morning and afternoon of December 2, 2015, representatives of Simpson Thacher continued to communicate with representatives of OMM regarding the requested standstill provisions and informed OMM that the Special Committee and the Board may adopt the Rights Agreement if Buyer Group 2 did not agree to a standstill. However, Buyer Group 2 continued to reject any limitation on their ability to acquire Shares and ADSs. Also on the morning of December 2, 2015, representatives of Simpson Thacher and representatives of S&C discussed the draft of the Rights Agreement prepared by S&C, including the provisions which ensured that the Special Committee had the right to redeem or waive the Rights Agreement.

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        On December 2, 2015, the Board held a telephonic meeting at which representatives of Simpson Thacher, representatives of S&C and representatives of Conyers were present. The Board discussed, among other considerations, Buyer Group 2's refusal to agree to customary standstill provisions previously accepted by Buyer Group 1 and the need for the Company to protect itself from hostile actions while the Special Committee evaluated the Buyer Group 1 Proposal and the Buyer Group 2 Proposal. The Board also discussed the exclusive right of the Special Committee to redeem the rights or amend the Rights Agreement. Following discussion, the Board resolved to adopt the Rights Agreement. After the Board meeting, the Company issued a press release announcing the adoption of the Rights Agreement and furnished the press release as an exhibit to a current report on Form 6-K.

        Between December 1, 2015 and December 7, 2015, representatives of Simpson Thacher and representatives of J.P. Morgan communicated with representatives of Huatai and representatives of OMM to seek clarification regarding the proposed terms and structure of the Buyer Group 2 Proposed Transaction, including the specific government filings and approvals which would be required for the Buyer Group 2 Proposed Transaction and details of the composition of Buyer Group 2. On December 3, 2015, OMM, on behalf of Buyer Group 2, provided written responses to various information requests sent by J.P. Morgan on December 1, 2015. On December 4, 2015, Simpson Thacher, on behalf of the Special Committee, sent to Huatai and OMM a response to Buyer Group 2's stated concerns regarding the Company's adoption of the Rights Agreement as well as a list of follow-up questions regarding the Buyer Group 2 Proposal, and on December 7, 2015, OMM provided written responses to such follow-up questions. During the same period of time, representatives of J.P. Morgan also spoke separately to representatives of Buyer Group 1 and Buyer Group 2 to understand their expected timelines for signing and closing their respective proposed transactions.

        On December 8, 2015, Davis Polk, international legal counsel to Buyer Group 1, sent to Simpson Thacher the first draft of the merger agreement for the Buyer Group 1 Proposed Transaction.

        On December 9, 2015, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. The Special Committee discussed the various communications between representatives of J.P. Morgan and representatives of Simpson Thacher, on the one hand, and representatives of Buyer Group 1 and representatives of Buyer Group 2, on the other hand, including a request from Buyer Group 2 for an opportunity to speak directly to the members of the Special Committee in order to clarify their intentions regarding the Buyer Group 2 Proposed Transaction and answer any questions the Special Committee may have. The Special Committee discussed, among other matters, the possible actions that Buyer Group 2 may take in connection with the Buyer Group 2 Proposed Transaction in light of Mr. Zhang's voting power, the potential impact of any such actions on the Special Committee's process, and the importance of obtaining Buyer Group 2's cooperation and participation in the Special Committee' evaluation process. The Special Committee concluded that it would be desirable to have a direct conversation with Buyer Group 2 and directed J.P. Morgan to coordinate such meeting.

        On December 10, 2015, the Special Committee, representatives of J.P. Morgan, representatives of Simpson Thacher, representatives of Buyer Group 2, representatives of OMM, representatives of Skadden, Arps, Slate, Meagher & Flom LLP ("Skadden"), international legal counsel to one member of Buyer Group 2, representatives of Huatai, and representatives of Tian Yuan Law Firm ("Tian Yuan"), PRC legal counsel to Buyer Group 2 held a telephonic meeting to discuss the Buyer Group 2 Proposal. During the meeting, representatives of Meinian explained that Buyer Group 2 hoped to gain Mr. Zhang's support for the Buyer Group 2 Proposal, in which case the Buyer Group 2 Proposed Transaction would be structured as a merger. The representatives of Meinian further explained that, if Mr. Zhang were unwilling to support the Buyer Group 2 Proposal, Buyer Group 2 would instead proceed with a two-step transaction in which it would launch a tender offer to directly acquire Shares, which could be followed by a "back-end" merger depending on the percentage of the Company's voting power acquired in the tender offer. Representatives of Buyer Group 2 also noted that Buyer Group 2

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planned to fund the Buyer Group 2 Proposed Transaction through equity contributions from the members of Buyer Group 2. The parties at the meeting further discussed, among other matters, Buyer Group 2's analysis regarding regulatory filings and approvals which would be required in connection with the Buyer Group 2 Proposed Transaction as well as the proposed conditions of the tender offer.

        On December 11, 2015, the Special Committee engaged Jun He Law Offices ("JunHe") to serve as PRC legal counsel to the Special Committee. The Special Committee instructed JunHe to perform an analysis on any required PRC regulatory filings and approvals for each of the Buyer Group 1 Proposed Transaction and the Buyer Group 2 Proposed Transaction.

        On December 14, 2015, the Special Committee received a revised proposal letter from Buyer Group 2 which set forth certain modifications and clarifications to the Buyer Group 2 Proposal, including an increase in the proposed offer price from US$22 per ADS or US$44 per Share to US$23.50 per ADS or US$47 per Share.

        On the same day, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. The Special Committee discussed updates to the Buyer Group 1 Proposal and Buyer Group 2 Proposal, including the price increase by Buyer Group 2, the status of the due diligence conducted by Buyer Group 1, the indication from Buyer Group 1 that it may add members to its consortium, the key issues in the draft merger agreement from Buyer Group 1, the financing capabilities of each buyer group, and the timetable for each buyer group to complete its work and provide a binding offer. The Special Committee discussed, among other matters, its dissatisfaction with the lower offer price of US$17.80 per ADS or US$37.60 per Share proposed by Buyer Group 1 and the Special Committee's concern that Buyer Group 2 would be unable to propose a transaction structure that would be reasonably capable of being consummated given the challenges for Buyer Group 2 to acquire Shares representing at least 50% of the voting power of the Company in the tender offer (which Buyer Group 2 had explained would be a condition to their tender offer) without support from Mr. Zhang and other directors and officers of the Company who collectively held close to 50% of the voting power of the Company. The Special Committee also discussed conducting a market check as a means to evaluate available alternatives for the Company. After discussion, the Special Committee instructed J.P. Morgan to conduct a market check and instructed J.P. Morgan and Simpson Thacher to continue to engage with both existing buyer groups to negotiate price, conditions and other key terms, and to obtain equity commitment letters from each of the existing buyer groups.

        On December 15, 2015, representatives of Simpson Thacher and representatives of J.P. Morgan were informed that China Life Investment Holding Company Limited ("China Life") may join Buyer Group 1 as a new equity consortium member. Representatives of J.P. Morgan contacted representatives of Buyer Group 1 to remind them that Buyer Group 1 would be required to notify the Special Committee in advance of adding any new equity consortium members.

        On December 16, 2015, representatives of Simpson Thacher, representatives of J.P. Morgan, representatives of JunHe, representatives of Huatai, representatives of OMM, representatives of Skadden and representatives of Tian Yuan held a teleconference to discuss PRC regulatory filings or approvals which may be required in connection with the Buyer Group 2 Proposed Transaction.

        On the same day, representatives of Simpson Thacher sent, on behalf of the Special Committee, a written response to Buyer Group 2 acknowledging receipt of the revised Buyer Group 2 Proposal and confirming that the Special Committee was continuing to evaluate the Buyer Group 2 Proposal, the Buyer Group 1 Proposal and other strategic alternatives available to the Company.

        On December 21, 2015, OMM sent the first draft of the merger agreement for the Buyer Group 2 Proposed Transaction to Simpson Thacher and J.P. Morgan, which envisioned a two-step transaction involving a tender offer followed by a merger.

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        On the same day, representatives of J.P. Morgan, representatives of Huatai, representatives of OMM and representatives of Skadden discussed on a teleconference the timetable for Buyer Group 2 to finalize its offer and send a binding proposal letter to the Special Committee as well as the Special Committee's proposed process for evaluating the Buyer Group 2 Proposal and strategic alternatives.

        Later during the afternoon on the same day, representatives of J.P. Morgan, representatives of FountainVest Partners and representatives of Davis Polk discussed on a teleconference the timetable for Buyer Group 1 to finalize its offer and send a binding proposal letter and the Special Committee's process for evaluating the Buyer Group 1 Proposal and strategic alternatives. During the call, representatives of J.P. Morgan communicated the Special Committee's request that Buyer Group 1 significantly increase its proposed offer price. Representatives of Buyer Group 1 explained again certain reasons why Mr. Zhang would not support the Buyer Group 2 Proposed Transaction and Buyer Group 1's view that this would result in a lack of certainty for the Buyer Group 2 Proposed Transaction.

        On December 24, 2015, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan, representatives of Simpson Thacher and representatives of JunHe were present. The Special Committee discussed updates regarding the Buyer Group 1 Proposal and the Buyer Group 2 Proposal, including the status of each buyer group's due diligence and financing efforts. Representatives of J.P. Morgan reported that the Company's management was working to finalize financial projections for review by the Special Committee. The Special Committee discussed, among other matters, JunHe's analysis of antitrust implications and regulatory filings in connection with each of the proposed transactions, each of the draft merger agreements received from the buyer groups, and certain additional potential Buyer Group 1 consortium members (including China Life). The Special Committee noted that the lower offer price continued to be a key issue with regards to the Buyer Group 1 Proposal and the lack of closing certainty continued to be a key issue with regards to the Buyer Group 2 Proposal.

        On December 30, 2015 and December 31, 2015, representatives of Davis Polk informed representatives of Simpson Thacher of Buyer Group 1's intention to add certain new members to its consortium, including among others China Life, New China Capital International Management Limited ("New China Capital") and Alibaba, and confirmed that the inclusion of such new members would not increase the beneficial ownership in the Company held by Buyer Group 1. An amended and restated consortium agreement by and among the members of Buyer Group 1 was filed as an attachment to an amendment to the Schedule 13D of Mr. Zhang and certain of his affiliates on January 5, 2016.

        On January 6, 2016, the Company received a further revised proposal letter from Buyer Group 2 which indicated a further increase in the proposed offer price from US$23.50 per ADS or US$47 per Share to US$25.00 per ADS or US$50 per Share. The revised Buyer Group 2 Proposal also described the proposed two-step merger process and identified additional members to be added to the Buyer Group 2 consortium. On the same day, OMM sent to Simpson Thacher a draft form of equity commitment letter to be provided by the Buyer Group 2 members, and the Company and Buyer Group 2 entered into a non-disclosure agreement without any standstill obligations.

        On January 7, 2016, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. The Special Committee discussed, among other matters, the increase in the proposed price by Buyer Group 2 and Buyer Group 2's confirmation to J.P. Morgan that it did not require any debt financing, the status of Buyer Group 1's due diligence and financing efforts, and the desire to align the timelines and maintain consistency in approach on merger agreement terms for Buyer Group 1 and Buyer Group 2. Representatives of J.P. Morgan reported to the Special Committee that the market check conducted by J.P. Morgan did not result in any indications of interest by third parties to potentially pursue a going private or other strategic transaction involving the Company, except from persons who had subsequently joined an

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existing buyer group. Representatives of Simpson Thacher reviewed with the Special Committee the key open issues in the draft merger agreements proposed by the two buyer groups, and the Special Committee discussed its positions on these key issues. Representatives of Simpson Thacher also explained the two-step process proposed by Buyer Group 2. The Special Committee discussed, among other matters, the concern that, even in a two-step merger process, Buyer Group 2 would still require shareholder approval to ultimately consummate the merger.

        On January 11, 2016, representatives of Simpson Thacher, representatives of Davis Polk and representatives of Bank of America Merrill Lynch ("BAML"), the financial advisor to Buyer Group 1, held a teleconference to discuss the Special Committee's positions on various key open issues in Buyer Group 1's draft merger agreement. During the call, representatives of Simpson Thacher also requested that Buyer Group 1 provide a revised proposal reflecting a higher offer price, its debt commitment letters, form of the equity commitment letters to be provided by each equity consortium member, and form of the limited guarantee to cover the reverse termination fee payable by Buyer Group 1. Representatives of J.P. Morgan and representatives of BAML also held a teleconference to introduce their teams and discuss the status of the Buyer Group 1 Proposed Transaction.

        Later in the afternoon of January 11, 2016, representatives of Simpson Thacher, representatives of OMM and representatives of Skadden held a teleconference to discuss the Special Committee's positions on various key open issues in Buyer Group 2's draft merger agreement. During the call, representatives of Simpson Thacher explained that the Special Committee would require from each member of Buyer Group 2 an equity commitment letter with regards to the purchase price payable in the tender offer and merger as well as limited guarantees or a deposit in an escrow account to cover the reverse termination fee payable by Buyer Group 2 under certain circumstances pursuant to the merger agreement.

        On January 12, 2016, Simpson Thacher sent to Davis Polk a revised merger agreement reflecting the Special Committee's positions on various issues with respect to the Buyer Group 1 Proposed Transaction. On the same day, Simpson Thacher received from Davis Polk copies of executed highly confident letters from the debt financing sources of Buyer Group 1.

        On January 13, 2016, Simpson Thacher sent to OMM and Skadden a revised two-step merger agreement reflecting the Special Committee's positions on various issues with respect to the Buyer Group 2 Proposed Transaction as well as a revised draft of equity commitment letter.

        On January 19, 2016, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. During the meeting, the Special Committee discussed certain convertible loans, in the aggregate amount of RMB 1.4 billion, entered into by the Company with various lenders in December 2015. Representatives of Simpson Thacher reviewed with the Special Committee the key terms of the loans, including the Company's obligation to facilitate the lenders' participation in a going private transaction involving the Company. The Special Committee noted that the Board had previously approved the convertible loans in November 2015 to address the significant concerns regarding the Company's cash position and ability to pursue strategic acquisitions which were important to maintain the Company's market position.

        On January 21, 2016, representatives of Simpson Thacher spoke with representatives of OMM to discuss certain issues in the draft two-step merger agreement and the next steps with regards to the Buyer Group 2 Proposal.

        Later in the afternoon of January 21, 2016, representatives of Simpson Thacher spoke with representatives of Davis Polk to discuss updates to Buyer Group 1's financing efforts. During the call, representatives of Davis Polk explained that Buyer Group 1 would be financing its proposed transaction with equity financing (with no requirement for debt financing) and was discussing internally the Special

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Committee's requests for a revised offer price, proposed equity split among the Buyer Group 1 members, and feedback on the draft form of equity commitment letter.

        On January 22, 2016, representatives of J.P. Morgan spoke with representatives of BAML to discuss updates to the Buyer Group 1 Proposal, during which representatives of BAML verbally confirmed that Buyer Group 1 had agreed to revise its offer price and noted that Buyer Group 1 intended to send a revised proposal to the Special Committee within the next week.

        On January 25, 2016, Simpson Thacher received from OMM a revised two-step merger agreement for the Buyer Group 2 Proposed Transaction.

        Later in the afternoon of January 25, 2016, the Special Committee held a telephonic meeting at which representatives of the Company's management, representatives of J.P. Morgan, and representatives of Simpson Thacher were present. Mr. Luke Chen ("Mr. Chen"), the chief financial officer of the Company, reviewed with the Special Committee the financial projections prepared by the Company's management. The Special Committee discussed with Mr. Chen, among other matters, the key underlying assumptions in the financial projections. After discussion, the Special Committee approved the financial projections prepared by the Company's management for use by J.P. Morgan and directed representatives of J.P. Morgan to prepare its valuation analyses with respect to the Company based on such projections. J.P. Morgan did not deliver any valuation analyses to the Special Committee at this stage of the process.

        On January 29, 2016, representatives of J.P. Morgan, representatives of Simpson Thacher and representatives of Davis Polk held a teleconference to discuss certain responses from Buyer Group 1 to the various requests from the Special Committee. During the call, Davis Polk communicated that Buyer Group 1 would increase its offer price from US$17.80 per ADS or US$37.6 per Share to US$21.50 per ADS or US$43.00 per Share and would fund the transaction with all equity financing. Davis Polk noted that it would send a revised merger agreement, a draft form of equity commitment letter and a draft form of the limited guarantee within the next week.

        On February 1, 2016, BAML sent to J.P. Morgan a revised proposal letter from Buyer Group 1 which set forth certain modifications and clarifications to Buyer Group 1, including an increase in the proposed offer price from US$17.80 per ADS or US$37.6 per Share to US$21.50 per ADS or US$43.00 per Share, a revised draft merger agreement, a draft form of equity commitment letter and a draft form of limited guarantee.

        On the same day, OMM sent to Simpson Thacher a revised form of equity commitment letter that the members of Buyer Group 2 would be willing to execute, and Huatai sent to J.P. Morgan a proposed timetable related to the Buyer Group 2 Proposed Transaction.

        Later in the afternoon on February 2, 2016, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. Representatives of Simpson Thacher reviewed with the Special Committee the key issues in the Buyer Group 1 merger agreement and the Buyer Group 2 merger agreement, and the Special Committee provided its feedback. The Special Committee discussed its concern that the revised offer price received from Buyer Group 1 was still significantly less than Buyer Group 2's revised offer price, and its continuing concerns about the feasibility of a successful tender offer for 50% of the voting power of the Company (and a subsequent merger), as proposed by Buyer Group 2, in light of the fact that Mr. Zhang and other directors and officers who opposed the Buyer Group 2 Proposal held close to 50% of the voting power of the Company. The Special Committee members discussed that the process should provide each buyer group with sufficient time to maximize its proposed price and certainty of funds. The Special Committee also directed J.P. Morgan and Simpson Thacher to explore alternative options with Buyer Group 2 and its advisors which would provide greater certainty of closing for the Buyer Group 2 Proposed Transaction.

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        On February 1, 2016 and February 3, 2016, Simpson Thacher received from Davis Polk certain written materials describing the PRC regulatory filings and approvals required for the Buyer Group 1 Proposed Transaction in light of the addition of China Life, a regulated insurance company, to the Buyer Group 1 consortium.

        On February 5, 2016, representatives of Simpson Thacher, representatives of OMM and representatives of Skadden held a teleconference to discuss the Special Committee's concern with respect to the feasibility of the Buyer Group 2 Proposed Transaction, including how Buyer Group 2 would be able to successfully acquire at least 50% of the voting power in the Company in the tender offer in light of the fact that close to 50% of the voting power of the Company was held by Mr. Zhang and other directors or officers of the Company who may not be supportive of the Buyer Group 2 Proposed Transaction. Representatives of OMM noted that Buyer Group 2 could be willing to consider a lower threshold for the tender offer and discussed certain proposed strategies (including a potential top-up option) for Buyer Group 2 to potentially obtain majority voting control of the Company.

        On the same day, Simpson Thacher sent to Davis Polk a revised merger agreement for the Buyer Group 1 Proposed Transaction, and Simpson Thacher sent to OMM and Skadden a revised two-step merger agreement for the Buyer Group 2 Proposed Transaction.

        Between February 6, 2016 and February 25, 2016, representatives of Simpson Thacher continued to exchange drafts of the transaction documents for the Buyer Group 1 Proposed Transaction with representatives of Davis Polk and hold teleconferences to discuss the remaining open issues on such transaction documents, and representatives of J.P. Morgan continued to communicate to representatives of BAML the Special Committee's request that Buyer Group 1's offer price be further increased. During the same period of time, representatives of Simpson Thacher continued to exchange drafts of the transaction documents for the Buyer Group 2 Proposed Transaction with representatives of OMM and representatives of Skadden and to hold teleconferences to discuss the remaining open issues on such transaction documents. Upon the request of the Special Committee, representatives of J.P. Morgan also reached out to certain significant shareholders of the Company to inquire about their views on the two competing proposals.

        During this period, representatives of J.P. Morgan and representatives of Meinian held an in-person meeting, during which representatives of J.P. Morgan confirmed to the representatives of Meinian that the Special Committee was devoting equal attention and effort to evaluating and negotiating the two proposed transactions. Representatives of J.P. Morgan also requested that Meinian provide evidence of Buyer Group 2's financing sources, including proof of creditworthiness of each financing source.

        On February 23, 2016, representatives of J.P. Morgan received verbal notification from representatives of BAML that, in response to the Special Committee's request for a higher offer price, Buyer Group 1 had verbally agreed to further increase its offer price from US$21.50 per ADS or US$43.00 per Share to US$24.00 per ADS or US$48.00 per Share.

        On February 26, 2016, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. During the meeting, representatives of J.P. Morgan reported to the Special Committee that all of the significant shareholders of the Company contacted by J.P. Morgan had confirmed that they would support the Buyer Group 1 Proposed Transaction if the offer price of the two proposed transactions were the same in light of the greater certainty of closing for the Buyer Group 1 Proposed Transaction, except that one significant shareholder said that it would support the Buyer Group 1 Proposed Transaction if the offer price came close to matching the price of the Buyer Group 2 Proposed Transaction in light of the greater certainty of closing for the Buyer Group 1 Proposed Transaction and its satisfaction with the Company's current operations and management. Representatives of Simpson Thacher reviewed with the Special Committee the outstanding key issues in each of the merger agreements. The Special

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Committee discussed, among other matters, its position on the open issues in each merger agreement, the price increase by Buyer Group 1, regulatory approvals required for the Buyer Group 1 Proposed Transaction, the potential impact on the Company if the Buyer Group 2 Proposed Transaction were approved but the Buyer Group 2 tender offer was not successful, concerns regarding Buyer Group 2's ability to obtain necessary U.S. dollar funds to consummate the Buyer Group 2 Proposed Transaction, and the need to obtain the best offer price with the highest certainty of closing.

        On March 1, 2016, Simpson Thacher sent to Davis Polk a revised merger agreement and a revised form of equity commitment letter for the Buyer Group 1 Proposed Transaction and sent to OMM and Skadden a revised two-step merger agreement for the Buyer Group 2 Proposed Transaction. On the same day, representatives of Simpson Thacher and representatives of Davis Polk discussed on a call the outstanding issues to the merger agreement for the Buyer Group 1 Proposed Transaction.

        Between March 3, 2016 and March 4, 2016, representatives of Simpson Thacher, representatives of JunHe, representatives of Davis Polk, representatives of Fangda, PRC legal counsel to Buyer Group 1, representatives of China Life and Zhong Lun Law Firm ("ZhongLun"), PRC legal counsel to China Life, held a number of teleconferences to discuss the various PRC regulatory approvals that would be required in connection with the Buyer Group 1 Proposed Transaction. During the call, representatives of Simpson Thacher communicated to the parties that the Special Committee requested that Buyer Group 1 resolve such regulatory risks internally.

        On March 4, 2016, representatives of Simpson Thacher, representatives of J.P. Morgan, representatives of OMM and representatives of Skadden held a telephonic meeting to discuss the remaining open items in the merger agreement, including the Special Committee's request that Buyer Group 2 agree to pay a reverse termination fee in the event the tender offer was unsuccessful in light of Buyer Group 2's inability to provide evidence of support from shareholders and the challenges of satisfying the tender offer condition of 50% of the voting power of the Company given the voting power of Mr. Zhang and the other directors and officers of the Company.

        Between March 5, 2016 and March 20, 2016, representatives of Simpson Thacher continued to engage with the advisors for Buyer Group 1 to resolve the remaining open issues on the transaction documents for the Buyer Group 1 Proposed Transaction, including open issues relating to regulatory approvals required by Buyer Group 1, reverse termination fees payable by Buyer Group 1 under certain circumstances, and a "majority of the minority" vote requirement pursuant to which the Buyer Group 1 Proposed Transaction would need to be approved by a majority of the shareholders unaffiliated with Buyer Group 1. During the same period of time, representatives of Simpson Thacher continued to engage with advisors of Buyer Group 2 to resolve the remaining open issues on the transaction documents for the Buyer Group 2 Proposed Transaction, including with respect to the certainty of consummation of such transaction and Buyer Group 2's request for a top-up option from the Company to enable Buyer Group 2 to reach majority voting power if it lowered its tender offer condition below 50% of voting power to increase deal certainty. Representatives of Simpson Thacher also provided to Davis Polk and OMM, respectively, copies of the Company's convertible loan agreements and certain amendments thereto. Representatives of J.P. Morgan also continued to coordinate with representatives of BAML, representatives of Huatai and representatives of each buyer group to complete J.P. Morgan's review of the creditworthiness of the members of each buyer group and to discuss the status of each buyer group's financing arrangements.

        On March 21, 2016, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. During the meeting, representatives of J.P. Morgan reported to the Special Committee on their conversations with representatives from each of the buyer groups, noting that both buyer groups had requested additional time to complete their respective financing arrangements and to reach agreement on the terms of a final proposal to be made to the Special Committee. The representatives of J.P. Morgan also reported on its various

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conversations with certain key shareholders of the Company, noting that such key shareholders continued to express support for the Buyer Group 1 Proposed Transaction if Buyer Group 1's offer price were increased. Representatives of Simpson Thacher reviewed with the Special Committee the final outstanding issues in the merger agreement for the Buyer Group 1 Proposed Transaction and the final outstanding issues in the two-step merger agreement for the Buyer Group 2 Proposed Transaction. The Special Committee discussed each of the key issues, including issues with respect to closing conditions, termination rights and termination fees, and instructed the representatives of Simpson Thacher to provide the Special Committee's feedback to each of the buyer groups and circulate revised merger agreements. The Special Committee further discussed the PRC government's capital outflow and currency restrictions as well as the Special Committee's concerns regarding Buyer Group 2's ability to obtain necessary U.S. dollar funds to consummate the Buyer Group 2 Proposed Transaction.

        Over the course of the next several weeks, representatives of Simpson Thacher and representatives of J.P. Morgan continued to work with the representatives of and advisors to Buyer Group 1 and Buyer Group 2, respectively, to resolve the remaining issues in the merger agreements and finalize all transaction documents, complete J.P. Morgan's creditworthiness analysis for each buyer group, confirm each buyer group's final financing structure, complete the analysis on required PRC regulatory approvals for each proposed transaction, and, in the case of Buyer Group 1, to request a further increase to its offer price and, in the case of Buyer Group 2, to seek methods to mitigate the risks to the Company and its shareholders in connection with the challenges to consummating the Buyer Group 2 Proposed Transaction. At the beginning of this period, each buyer group requested that the Special Committee provide it with some additional time to finalize its financing arrangements and to complete its work in all of the other outstanding workstreams. Given that neither buyer group was ready to provide its final, binding offer, the Special Committee agreed to provide both buyer groups with some additional time before it would distribute a process letter and set a deadline by which to receive final, binding offers from the buyer groups. During this period, each buyer group provided updates periodically to representatives of Simpson Thacher and representatives of J.P. Morgan regarding such buyer group's progress in finalizing its financing arrangements and the other outstanding workstreams.

        On April 1, 2016, the Special Committee and representatives of Buyer Group 2, including Mr. Yu Rong, Chairman of Meinian and Mr. Yilong Chen, Board Secretary of Meinian, held a telephonic meeting to discuss the Buyer Group 2 Proposal at which representatives of J.P. Morgan and representatives of Huatai were present. At the meeting, the representatives of Buyer Group 2 discussed with the Special Committee their intentions with respect to the Buyer Group 2 Proposal and their views regarding the potential benefits of the Buyer Group 2 Proposed Transaction to the Company.

        On April 24, 2016, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. Representatives of J.P. Morgan provided the Special Committee with a status update on each buyer group's efforts to finalize its financing arrangements and the terms of its final proposal, and representatives of Simpson Thacher provided the Special Committee with an update on negotiations of the transaction documents for each buyer group. The Special Committee discussed its willingness to provide additional time to each buyer group to maximize the likelihood of receiving higher proposed prices and increasing the level of deal certainty to be provided by each buyer group.

        On April 26, 2016, Davis Polk sent to Simpson Thacher the revised merger agreement and revised form of equity commitment letter for the Buyer Group 1 Proposed Transaction.

        On April 28, 2016, upon the request of Buyer Group 1, an in-person meeting was held in Beijing to discuss the remaining open issues in the April 26, 2016 drafts of the revised merger agreement and the revised form of equity commitment letter. The meeting was attended by representatives of J.P. Morgan, representatives of Simpson Thacher, representatives of Davis Polk, representatives of China Life, representatives of New China Capital, Mr. Zhang, and certain other representatives of

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Buyer Group 1. During the meeting, representatives of J.P. Morgan and representatives of Simpson Thacher communicated the Special Committee's disappointment in the lack of progress in Buyer Group 1's most recent draft merger agreement to address the concerns of the Special Committee and the need for Buyer Group 1 to propose a higher offer price. The parties discussed, among other matters, the regulatory approvals required for the Buyer Group 1 Proposed Transaction, the Special Committee's request that Buyer Group 1 pay a reverse termination fee if Buyer Group 1 failed to obtain such required regulatory approvals, termination fee amounts, and other open issues in the Buyer Group 1 merger agreement.

        On May 3, May 18 and May 20, 2016, the Special Committee held telephonic meetings at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. The Special Committee discussed status updates with respect to the Buyer Group 1 Proposal and the Buyer Group 2 Proposal (including each buyer group's continuing requests for additional time to finalize its proposal). At the meeting on May 20, 2016, the Special Committee directed representatives of J.P. Morgan to send to each of the buyer groups a process letter which required the submission of such buyer group's best and final offer by June 10, 2016.

        On May 23, 2016, representatives of J.P. Morgan sent to each of Buyer Group 1 and Buyer Group 2 a process letter with instructions for each buyer group to submit its best and final offer to the Special Committee by June 10, 2016, together with proposed final versions of all transaction documents.

        Over the next two weeks, representatives of Simpson Thacher and representatives of J.P. Morgan had various conversations with the representatives of and advisors to Buyer Group 1 and Buyer Group 2, respectively, to discuss the process for submitting a best and final offer and potential resolutions of the remaining outstanding issues. During this period, the Special Committee held telephonic meetings on May 26, 2016 and June 4, 2016, and the Special Committee, representatives of Simpson Thacher and representatives of J.P. Morgan continued to communicate, in each case, regarding updates on the progress of each buyer group and additional feedback from significant shareholders of the Company.

        On June 6, 2016, the Company received a non-binding proposal letter from Yunfeng, in which Yunfeng proposed to acquire all of the Shares and ADSs in an all-cash transaction for US$20.00 to US$25.00 per ADS or US$40.00 to US$50.00 per Share (such proposal, the "Yunfeng Proposal", and such going-private transaction, the "Yunfeng Proposed Transaction"). In addition to the offer price, Yunfeng's non-binding proposal letter set forth certain other principal terms of the Yunfeng Proposal, including that Yunfeng was prepared to fund the Yunfeng Proposed Transaction with 100% equity capital but did not rule out the possibility of securing debt financing for the purpose of effecting the Yunfeng Proposed Transaction, and that the Yunfeng Proposal was subject to certain conditions, including (i) Yunfeng being granted the opportunity to conduct appropriate due diligence to its reasonable satisfaction, (ii) retention of key members of management team to Yunfeng's reasonable satisfaction, and (iii) other conditions customary to a transaction of such nature. In the Yunfeng Proposal, Yunfeng noted that its proposal was to acquire 100% of the outstanding shares of the Company if Mr. Zhang chose to exit the Company. At this time, based on the references in the Yunfeng Proposal to the possibility of management of the Company continuing to participate in the Company, it was unclear whether the Yunfeng Proposed Transaction would constitute a "going private" transaction involving the participation of an affiliate of the Company. Yunfeng is a private equity firm established in 2010 by a group of entrepreneurs and industry leaders, including its Chairman, Mr. David Feng YU, and Mr. Jack Yun MA, the Co-founder and Chairman of the board of directors of Alibaba. Yunfeng developed the Yunfeng Proposal independently of Alibaba's involvement in Buyer Group 1 and without participation by Alibaba, and Alibaba did not provide Yunfeng with information concerning Buyer Group l's negotiations with the Special Committee.

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        After receiving the Yunfeng Proposal, on June 6, 2016, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. The Special Committee discussed, among other matters, the proposed terms of the Yunfeng Proposal, the steps to be taken by the Special Committee to evaluate the Yunfeng Proposal and the potential impact of the Yunfeng Proposal on the substantially final negotiations with Buyer Group 1 and Buyer Group 2. After discussion, and in light of the fact that each of Buyer Group 1 and Buyer Group 2 had substantially final transaction documents with a limited number of open issues to be resolved, the Special Committee decided that the June 10, 2016 submission deadline applicable to Buyer Group 1 and Buyer Group 2 would not be extended, but that the Special Committee and its advisors would engage with Yunfeng to obtain further information regarding the Yunfeng Proposed Transaction. On the same day, the Company issued a press release announcing the receipt of the Yunfeng Proposal and furnished such press release and the Yunfeng Proposal as exhibits to a Current Report on Form 6-K.

        During the afternoon of June 7, 2016, the Special Committee received from Mr. Zhang a notice letter stating that Mr. Zhang and his affiliates who were members of Buyer Group 1 had determined to cease their participation in the transactions contemplated by the Buyer Group 1 Proposal and withdraw the August 31, 2015 proposal for the Company, effective as of June 7, 2016 (the "Zhang Withdrawal Letter"). Mr. Zhang and his affiliates made this decision due to, among other factors, the fact that members of Buyer Group 1 had not been able to reach agreement on the terms of a revised offer, that Buyer Group 1 had not finalized its plans for committed financing, including loans from banks, which was required under the Special Committee's May 23, 2016 process letter, and their view that the Special Committee was unlikely to further extend the June 10, 2016 deadline. Alibaba's involvement in Buyer Group 1 effectively concluded with the Zhang Withdrawal Letter, and Alibaba was not a participant in the Yunfeng Proposal at this time.

        On June 8, 2016, Meinian publicly announced on the website of the Shenzhen stock exchange that it was withdrawing from Buyer Group 2 and that Buyer Group 2 would not submit a binding offer for a going private transaction involving the Company (the "Meinian Withdrawal Announcement").

        On June 8, 2016, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. Representatives of J.P. Morgan updated the Special Committee on various phone calls and other communications between J.P. Morgan and the different members of Buyer Group 1, during which certain members of Buyer Group 1 indicated that they had no prior notice that Mr. Zhang would withdraw from Buyer Group 1 and continued to express an intent to submit a binding offer on June 10, 2016 despite the Zhang Withdrawal Letter. The Special Committee discussed and acknowledged that, if such an offer were submitted by the remaining members of Buyer Group 1, the Special Committee and its advisors would need to re-evaluate the required regulatory filings and approvals and conduct again certain creditworthiness and financing analyses, among other tasks, in light of the changes to the Buyer Group 1 consortium structure. Representatives of J.P. Morgan also updated the Special Committee on conversations between representatives of J.P. Morgan and Yunfeng with respect to the Yunfeng Proposal, including that Yunfeng would require at least two months to complete its due diligence and may seek to raise equity financing for the Yunfeng Proposed Transaction.

        In the late afternoon on June 10, 2016, the Special Committee received a binding proposal letter from Company A, a member of Buyer Group 1, on behalf of certain unidentified members of a consortium (the "Company A Buyer Group") that proposed a going-private transaction to acquire all of the Shares and ADSs in an all-cash transaction for US$20.50 per ADS or US$41.00 per Share (such proposal, the "Company A Proposal", and such going-private transaction, the "Company A Proposed Transaction"). The Company A Proposal expressly stated that it expired at 5:00 p.m. Beijing time on June 12, 2016, and attached a draft merger agreement as well as a draft voting agreement and draft contribution agreement to be entered into by any existing shareholders who would join in the Company A Proposed Transaction.

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        Later in the evening of June 10, 2016, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan, representatives of Simpson Thacher and representatives of Walkers were present. Representatives of J.P. Morgan reviewed with the Special Committee certain missing information in the Company A Proposal which was required under the May 23, 2016 process letter, including among other information, the identities of the members of the Company A Buyer Group (other than Company A), the proposed equity split among consortium members, sources of funding, creditworthiness documents and equity commitment letters, and a proposal with respect to the treatment of certain existing shareholders. Representatives of Simpson Thacher reviewed with the Special Committee the key issues to the draft merger agreement provided by Company A. The Special Committee discussed, among other matters, that the Company A draft merger agreement contained a variety of new issues not previously raised during negotiations between the Special Committee and Buyer Group 1 as well as changes to Company A's position on many of the issues which had already been negotiated and resolved between the Special Committee and Company A (when acting as a member of Buyer Group 1). The Special Committee determined to work diligently together with Company A to obtain the missing information and to negotiate the terms of the Company A Proposal as quickly as possible, but noted the difficulty of completing a prudent evaluation of the Company A Proposal by 5:00 p.m. on June 12, 2016 in light of, among other factors, the absence of material information necessary to evaluate the credibility and certainty of the Company A Proposal, the large number of key outstanding issues in the draft merger agreement, and the need to conduct further analyses to determine material regulatory risks presented by the Company A Proposal.

        During the morning of June 11, 2016, representatives of J.P. Morgan and representatives of Simpson Thacher sent, on behalf of the Special Committee, a list of clarification questions and requests for additional information to representatives of Company A.

        Later in the day on June 11, 2016, representatives of J.P. Morgan, representatives of Simpson Thacher and representatives of Company A held a telephonic meeting to discuss the Special Committee's questions and requests and the key outstanding issues in the draft merger agreement. During the call, the parties discussed, among other matters, the key transaction terms proposed by Company A. Representatives of J.P. Morgan and representatives of Simpson Thacher explained that the additional information requested by the Special Committee was necessary for the Special Committee and its advisors to conduct its analyses of the creditworthiness of the Company A Buyer Group, required regulatory filings and approvals for the Company A Proposed Transaction, and other factors which were material to the Special Committee's evaluation and negotiation of the Company A Proposal. However, representatives of Company A refused to disclose the identities of the other members of the Company A Buyer Group or the equity split among the consortium members or respond to the other questions and requests from the Special Committee, and expressed an unwillingness to negotiate any substantive provisions in the draft merger agreements submitted by Company A on June 10, 2016. The representatives of Company A also stated that Company A was unwilling to extend the expiration date of the Company A Proposal and noted that Company A intentionally provided the Special Committee with limited time so that the Special Committee would be forced to make a quick decision.

        After the call with representatives of Company A, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan, representatives of Simpson Thacher and representatives of Walkers were present. Representatives of J.P. Morgan and representatives of Simpson Thacher updated the Special Committee on their earlier discussions with representatives of Company A. The Special Committee expressed its concern regarding whether the Special Committee had sufficient information regarding the Company A Proposal to make an informed decision in light of Company A's unwillingness to provide material information regarding the Company A Proposal, Company A's refusal to engage in negotiations regarding its draft merger agreement and Company A's refusal to extend its unilateral 48-hour deadline for accepting the Company A Proposal. After

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discussion, the Special Committee instructed representatives of J.P. Morgan and representatives of Simpson Thacher to continue to request from Company A the missing information and an extension to Company A's offer deadline and to continue to engage with Company A in negotiating the terms of the merger agreement.

        Also, on June 11, 2016, Yunfeng signed a non-disclosure agreement, which included customary standstill provisions, with the Company and began its due diligence investigation with respect to the Company.

        Throughout the day on June 12, 2016, the Special Committee, representatives of J.P. Morgan, representatives of Simpson Thacher and representatives of Company A continued to meet telephonically and communicate via e-mail to negotiate the terms of the merger agreement and discuss the Special Committee's outstanding requests for information. During these discussions, representatives of Company A confirmed to a member of the Special Committee, representatives of J.P. Morgan and representatives of Simpson Thacher that Company A was not willing to engage in any negotiations regarding the price or other substantive terms of the Company A Proposed Transaction. However, after further negotiations throughout the course of the day, Company A agreed to make certain modifications to its proposed merger agreement and agreed to extend the offer expiration deadline to 9:00 p.m. Beijing time on June 12, 2016.

        In the early evening of June 12, 2016, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan, representatives of Simpson Thacher and representatives of Walkers were present. A member of the Special Committee, representatives of J.P. Morgan and representatives of Simpson Thacher provided an update on their earlier discussions with representatives of Company A. The Special Committee discussed its key concerns regarding the Company A Proposal including, among other matters, with respect to price, conditionality, regulatory risks, restrictions on the Company's ability to change its recommendation, termination rights and termination fees. After discussion, the Special Committee determined that it would be unable to recommend the Company A Proposal due to, among other factors, the lack of critical information required for the Special Committee to complete its evaluation, the material risks and issues with respect to the Company A Proposal identified by the Special Committee, and the unwillingness of Company A to engage in discussions on price or other material issues in the merger agreement. The Special Committee directed representatives of Simpson Thacher to communicate to Company A the Special Committee's decision, key issues and concerns, and willingness to engage in further good faith discussions regarding the Company A Proposed Transaction if Company A were willing to further extend its deadline.

        The Special Committee, representatives of Simpson Thacher and representatives of J.P. Morgan continued to engage in discussions and exchange communications with representatives of Company A, and continued to communicate with the Special Committee regarding updates on the negotiations with Company A. Company A agreed to further extend the expiration time of the Company A Proposal to midnight Beijing time on June 12, 2016. However, the parties were unable to reach agreement on the proposed terms of the Company A Proposed Transaction by the revised midnight deadline, and shortly after such deadline had passed on June 13, 2016, Company A notified the Special Committee and its advisors that the Company A Proposal had expired.

        On June 14, 2016, representatives of J.P. Morgan and representatives of Yunfeng met in Beijing to discuss the Yunfeng Proposal and Yunfeng's due diligence requirements.

        On June 17, 2016, Yunfeng engaged PricewaterhouseCoopers Consultants (Shenzhen) Limited to serve as its accounting and tax advisor.

        Over the next two months, representatives of J.P. Morgan and representatives of Simpson Thacher coordinated with Yunfeng and its advisors in connection with Yunfeng's due diligence investigation with respect to the Company and Yunfeng's financing arrangements, including its potential equity and debt

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financing sources. The Company also entered into non-disclosure agreements with certain such potential equity and debt financing sources. During the same time, J.P. Morgan, pursuant to instructions from the Special Committee, also conducted a market check to determine whether any other parties would be interested in pursuing a transaction with the Company. No parties contacted by J.P. Morgan expressed any interest in pursuing a potential acquisition of, or other strategic transaction with, the Company.

        On August 10, 2016, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. Representatives of J.P. Morgan provided an update on their recent discussions with Yunfeng and reported to the Special Committee the results of the most recent market check.

        Also on August 10, 2016, Yunfeng engaged WSGR to serve as its U.S. legal counsel in connection with the Yunfeng Proposal.

        On August 12, 2016, Yunfeng engaged King & Wood Mallesons ("KWM") to conduct PRC legal due diligence in connection with the Yunfeng Proposal.

        On August 14, 2016, representatives of Yunfeng and representatives of its various legal advisors held a telephonic meeting during which Yunfeng and its counsels discussed the formation of acquisition vehicles, legal due diligence, financing, transaction structures and other legal issues, in each case in connection with the Yunfeng Proposed Transaction.

        On August 18, 2016, Simpson Thacher sent the first draft of a merger agreement with respect to the Yunfeng Proposed Transaction to WSGR.

        On September 7, 2016, WSGR sent a revised merger agreement to representatives of Simpson Thacher, reflecting Yunfeng's positions on various open issues, including, among other issues, the regulatory filings and approvals required in connection with the Yunfeng Proposed Transaction, a requirement for the VIE shares to be transferred and the VIE contracts terminated as of the closing, a requirement for the Company to obtain necessary consents for the Yunfeng Proposed Transaction under all outstanding bank loans, certain closing conditions, the treatment of unvested options held by certain members of senior management, the inclusion of a stand-alone material adverse effect closing condition, proposed termination fee amounts and triggers, the long-stop date, restrictions on the Company's ability to pursue proposals from third parties which had previously made acquisition proposals to the Company, the provision of limited guarantees instead of a third party performance guarantee, and the Company's representations and warranties.

        On September 14, 2016, representatives of Simpson Thacher, representatives of J.P. Morgan and representatives of WSGR held a teleconference to discuss Yunfeng's funding plans and the open issues in the draft merger agreement, including, among other issues, required regulatory filings and approvals, treatement of VIE shares and contracts, consents under outstanding bank loans, certain closing conditions, treatment of unvested options, termination fee amounts and triggers, and treatment of proposals from third parties which had previously made acquisition proposals to the Company.

        On September 15, 2016, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. Representatives of Simpson Thacher reviewed with the Special Committee, among other matters, the open issues in the draft merger agreement which had been discussed with representatives of WSGR on September 14, 2016, Yunfeng's plan to fund the Yunfeng Proposed Transaction solely with equity provided by its RMB and USD funds and co-investment vehicles, Yunfeng's request for a closing condition that the Company's outstanding convertible loans be repaid prior to closing, Yunfeng's confirmation that it did not currently intend to request any existing shareholders to roll over equity in the Yunfeng Proposed Transaction, and Yunfeng's request that certain members of senior management enter into post-closing transitional services arrangements with the Company. Representatives of J.P. Morgan provided an

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update to the Special Committee on their discussions with Yunfeng as well as Mr. Zhang, and noted that Mr. Zhang had indicated that, although he was not committed to Yunfeng with respect to the Yunfeng Proposed Transaction, he was not interested in working with any new potential buyer group given the potentially adverse and disruptive impact on the Company resulting from the prolonged going private process. Representatives of J.P. Morgan also discussed with the Special Committee certain feedback from Mr. Zhang regarding his views on the Yunfeng Proposed Transaction.

        After the call, on September 15, 2016, Simpson Thacher sent a revised merger agreement to WSGR, reflecting the Special Committee's positions on various open issues, including with respect to required regulatory filings and approvals, treatment of VIE shares and contracts, consents under outstanding bank loans, treatment of unvested options, termination fee amounts and triggers, the Company's representations and warranties, and treatment of proposals from third parties which had previously made acquisition proposals to the Company.

        Over the next two weeks between September 16, 2016 and September 30, 2016, the advisors to the Special Committee and the Company, on the one hand, had a number of teleconferences with the advisors of Yunfeng, on the other hand, during which parties discussed, among other matters, the open issues in the merger agreement, Yunfeng's financing plans in connection with the Yunfeng Proposal, matters related to the Company's PRC controlled entities, PRC regulatory matters, and next steps and timeline with respect to the signing of a definitive agreement in connection with the Yunfeng Proposal.

        On October 3, 2016, WSGR sent to Simpson Thacher a revised merger agreement, reflecting agreements between the Special Committee and Yunfeng resulting from the September negotiations and Yunfeng's positions on the remaining outstanding issues to the merger agreement, including, among other issues, the termination fee amounts and triggers, the long-stop date, expansion of the definition of "Competing Transaction" to include transfers of securities in the Company by certain significant shareholders of the Company, and treatment of proposals from third parties which had previously made acquisition proposals to the Company.

        On October 6, 2016, WSGR sent to Simpson Thacher a form of limited guarantee to be provided by each of Yunfeng and its equity co-investors and a form of equity commitment letter to be provided by each of Yunfeng and its equity co-investors. Also, on October 6, 2016, J.P. Morgan sent to Yunfeng and WSGR a form of fund confirmation letter (the "Fund Confirmation Letter") to be completed by Yunfeng and requested that Yunfeng and WSGR provide certain information regarding the Yunfeng funds, their structure and creditworthiness.

        On October 11, 2016, Simpson Thacher sent to WSGR a revised form of limited guarantee and a revised form of equity commitment letter.

        On October 12, 2016, the Special Committee held a telephonic meeting at which representatives of Simpson Thacher and representatives of J.P. Morgan were present. Representatives of J.P. Morgan and representatives of Simpson Thacher reported to the Special Committee regarding the key outstanding issues in the revised draft of the merger agreement, including, among other issues, the termination fee amounts and triggers, the long-stop date, expansion of the definition of "Competing Transaction" to include transfers of securities in the Company by certain significant shareholders of the Company, and treatment of proposals from third parties which had previously made acquisition proposals to the Company, and other updates to the Yunfeng Proposal, including Yunfeng's expressed intention to sign the merger agreement by the end of October and Yunfeng's request to meet with certain key members of the Company's management, including Mr. Zhang, to discuss their potential support for the Yunfeng Proposed Transaction and possible post-closing transitional arrangements. Representatives of J.P. Morgan also noted that Mr. Chen, the Company's chief financial officer, would prepare updates to Company management's financial projections which had been approved by the Special Committee in late January 2016. The Special Committee discussed, among other matters, the key issues in the merger

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agreement, the need for Yunfeng to propose a specific price, and Yunfeng's apparent unwillingness to proceed without obtaining support from key management, including Mr. Zhang.

        Following the Special Committee meeting, on October 13, 2016, Simpson Thacher sent to WSGR a revised draft merger agreement.

        On October 17, 2016, a representative of the Special Committee and a representative of Yunfeng held an in-person meeting. During the meeting, the representative of Yunfeng presented to the representative of the Special Committee a general introduction to Yunfeng and Yunfeng's investment rationale, and the representative of Yunfeng and the representative of the Special Committee discussed the next steps on the various outstanding work streams and the key outstanding issues in the merger agreement, including the termination fee amounts and triggers, the long-stop date, expansion of the definition of "Competing Transaction" to include transfers of securities in the Company by certain significant shareholders of the Company, and treatment of proposals from third parties which had previously made acuisition proposals to the Company.

        Over the next week, representatives of J.P. Morgan and representatives of Simpson Thacher continued to engage with representatives of WSGR and representatives of Yunfeng to negotiate the open issues in the merger agreement and follow up with Yunfeng in finalizing its financing plans in connection with the Yunfeng Proposal.

        On October 20, 2016, representatives of Simpson Thacher and representatives of WSGR held a telephonic meeting to discuss the open issues in the merger agreement and other transaction documents. During the telephonic meeting, representatives of Simpson Thacher and representatives of WSGR were able to resolve many of the open issues in the merger agreement, which included, among other issues, the long-stop date, certain Company representations and warranties, expansion of the definition of "Competing Transaction" to include transfers of securities in the Company by certain significant shareholders of the Company and the treatment of withholding taxes, and agreed on a list of key open issues to be discussed directly by the principals, which included among other issues, certain proposed restrictions on the Company's ability to pursue proposals from third parties, termination fee triggers, termination fee amounts, and certain closing conditions. During this meeting, representatives of WSGR also noted to the representatives of Simpson Thacher that representatives of Yunfeng had begun preliminary discussions with Mr. Zhang regarding certain potential post-closing arrangements (including with respect to non-compete restrictions and transitional services), and would provide the Special Committee with updates if Yunfeng and Mr. Zhang reached agreement on such post-closing arrangements.

        During the morning of October 21, 2016, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. Representatives of Simpson Thacher provided an update on the meeting with representatives of WSGR, reviewed the list of key open issues to be discussed directly by the principals, and reported that representatives of WSGR had noted that Yunfeng was committed to finalizing and signing the definitive transaction documents as soon as practicable if Yunfeng and Mr. Zhang were able to reach agreement on certain post-closing arrangements (including with respect to non-compete restrictions and transitional services). The Special Committee discussed the updates and agreed to re-convene after the meeting among the principals to discuss the key open issues.

        In the afternoon of October 21, 2016, representatives of the Special Committee and representatives of Yunfeng held an in-person meeting in Beijing to discuss the key open issues with respect to the Yunfeng Proposal, which included among other issues, certain proposed restrictions on the Company's ability to pursue proposals from third parties, termination fee triggers, termination fee amounts and treatment of the Company's outstanding convertible loans. During the meeting, representatives of Yunfeng also discussed the importance of obtaining Mr. Zhang's support, given the significant voting power represented by his Shares, and provided representatives of the Special

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Committee with an update regarding certain discussions between representatives of Yunfeng and Mr. Zhang.

        On October 24, 2016, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. A member of the Special Committee provided an update on the in-person meeting on October 21, 2016, and the Special Committee discussed the key open issues regarding the Yunfeng Proposed Transaction, which included, among other issues, the termination fee amounts and termination fee triggers, the Company's ability to pursue proposals from third parties which had previously made acquisition proposals to the Company, certain closing conditions, certain proposed agreements between members of the Company's management, and Yunfeng's equity and debt financing plans. The Special Committee further discussed, among other matters, Yunfeng's requirement that it obtain Mr. Zhang's support for the Yunfeng Proposed Transaction and the feasibility of consummating the Yunfeng Proposed Transaction if Mr. Zhang did not vote in favor of it. Following discussion, the Special Committee agreed that it and its advisors should continue to negotiate with Yunfeng and its advisors to reach agreement on the key open issues as soon as possible, and that the Special Committee should engage in discussions with Mr. Zhang to discuss the potential terms on which he would be willing to support the Yunfeng Proposed Transaction.

        Over the course of the next week, representatives of Simpson Thacher and representatives of WSGR continued to hold telephonic meetings to discuss the remaining open issues in the transaction documents and to exchange close-to-final drafts of such transaction documents.

        The Special Committee held a telephonic meeting on October 27, 2016 at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. The Special Committee discussed, among other matters, updates to discussions regarding the open issues in the merger agreement, including, among other issues, the termination fee amounts and termination fee triggers, certain closing deliverables and the offer price, the potential risks that Mr. Zhang would not support the Yunfeng Proposed Transaction, and the potential risks to the Company if it remained a stand-alone company, including with respect to the Company's convertible loans, liquidity position and certain business challenges.

        On October 28, 2016, Yunfeng sent to Simpson Thacher revised drafts of the form of equity commitment letter and form of limited guarantee.

        Later on October 28, 2016, Simpson Thacher sent to WSGR a revised draft merger agreement and requested, on behalf of the Special Committee, that Yunfeng provide a package proposal to the Special Committee with respect to the few remaining outstanding issues to the Yunfeng Proposed Transaction, including issues related to the termination fee triggers, termination fee amounts and certain closing deliverables.

        Representatives of Yunfeng and its advisors communicated to the Special Committee and its advisors that, although there were very few remaining outstanding issues in the transaction documents, Yunfeng would need additional time to complete its due diligence investigation with respect to the Company, finalize its financing arrangements and continue discussions with Mr. Zhang regarding certain post-closing arrangements (including with respect to non-compete restrictions and transitional services). Throughout the rest of November and December 2016, representatives of Yunfeng continued to meet with Mr. Zhang with respect to such arrangements and continued to engage with potential equity co-investors in connection with the Yunfeng Proposal.

        On October 31, 2016 and November 1, 2016, Simpson Thacher sent to WSGR revised drafts of the form of equity commitment letter and form of limited guarantee.

        The Special Committee held telephonic meetings on November 7, 2016 and December 13, 2016, at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. At each of

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these meetings, the Special Committee discussed, among other matters, updates to discussions with Yunfeng and discussions with Mr. Zhang and the Company's potential strategic alternatives (including expected future challenges if the Company remained as a stand-alone company). In addition, at the November 7, 2016 meeting, the Special Committee discussed whether to extend the Rights Agreement expiration date for another year. The Special Committee discussed, among other factors, the fact that Company continued to engage in a sale process and the potential risk of a hostile approach, including the potential impact on the discussions with Yunfeng with respect to the Yunfeng Proposed Transaction. Following discussion, the Special Committee approved the extension of the Rights Agreement expiration date for one year.

        In addition, in January and February 2017, representatives of J.P. Morgan, under instructions from the Special Committee, conducted another market check to determine whether any other parties would be interested in pursuing a transaction with the Company. In order to provide certain limited non-public information to, and facilitate the evaluation of the Company by, one potential buyer who expressed interest in pursuing a transaction with the Company, the Company entered into a non-disclosure agreement on January 9, 2017 with such potential buyer, wherein such potential buyer agreed to customary standstill provisions. However, all of the potential buyers contacted by J.P. Morgan eventually declined the opportunity to submit a proposal with respect to a potential transaction involving the Company.

        On January 7, 2017, a representative of the Special Committee and a representative of Yunfeng held an in-person meeting in the U.S. to discuss updates on Yunfeng's due diligence with respect to the Company (including Yunfeng's review of the Company's latest quarterly financial reports and its on-site visits), as well as updates on the Company's outstanding convertible loans and the composition of the Yunfeng's investment consortium.

        On January 11, 2017, J.P. Morgan, on behalf of the Special Committee, sent to Yunfeng a request that Yunfeng provide the Special Committee with a complete proposal of key terms for the Yunfeng Proposed Transaction and an estimated timetable to complete all remaining workstreams and execute a merger agreement.

        On January 15, 2017, representatives of the Special Committee and representatives of Yunfeng held an in-person meeting in Beijing to discuss the January 11, 2017 request from the Special Committee.

        On January 23, 2017, Yunfeng sent to the Special Committee a letter in which Yunfeng addressed certain of the inquiries raised by the January 11, 2017 request from J.P. Morgan. In the letter, Yunfeng reiterated its position that it was prepared to fund the Yunfeng Proposed Transaction with 100% equity capital contribution from Yunfeng and its consortium members and solely with offshore funds to increase the certainty of consummating the Yunfeng Proposed Transaction and set forth certain concerns of Yunfeng regarding the business performance of the Company, including (i) a slowdown in the Company's revenue growth in the first half of 2016 compared to the first half of 2015, (ii) a year-over-year decline in EBITDA during the first half of 2016 as well as a decline in the Company's EBITDA margin in the first half of 2016 compared to the first half of 2015, and (iii) a decrease in net income generated in the first half of 2016 compared to the first half of 2015 as well as a net loss attributable to shareholders for the nine months ended September 30, 2016 compared to net income attributable to shareholders during the same period in 2015. The letter from Yunfeng also referenced the depreciation of RMB against the U.S. dollar and noted that this had a negative financial impact on the Company's performance.

        On January 24, 2017, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. During the meeting, representatives of J.P. Morgan updated the Special Committee on its various discussions with representatives of Yunfeng and the results of its recent market check, and discussed with the Special Committee certain

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issues with the arguments and valuation analyses raised by Yunfeng in its January 23, 2017 letter, including, among other issues, the lack of consideration with respect to an increase in the Company's expected LTM EBITDA as of the anticipated closing date of the Yunfeng Proposed Transaction, the exclusion of certain unconsolidated investments, discounting (or lack thereof) of one-time issues which impacted the Company's performance in fiscal year 2016, and considerations regarding the FX rate (such as the market consensus view prior to June 2016, when Yunfeng had submitted its proposal). Representatives of Simpson Thacher reviewed with the Special Committee the outstanding issues in the merger agreement, which included, among other issues, termination fee amounts and triggers, certain closing deliverables to be delivered by the Company, certain Company interim operating covenants and the Company's representations and warranties. After discussion, the Special Committee instructed representatives of J.P. Morgan to prepare a response to Yunfeng.

        On February 3, 2017, J.P. Morgan, on behalf of the Special Committee, sent to Yunfeng a letter which noted certain issues with Yunfeng's valuation methodology set forth in its January 23, 2017 letter (which issues had been discussed during the January 24, 2017 telephonic meeting among the Special Committee, representatives of J.P. Morgan and representatives of Simpson Thacher).

        On February 19, 2017 and February 20, 2017, representatives of Yunfeng, representatives of WSGR, Mr. Zhang and representatives of Kirkland & Ellis ("Kirkland"), legal counsel to Mr. Zhang, held in-person meetings to discuss certain potential post-closing transitional and non-compete arrangements between the Company and Mr. Zhang.

        Between February 19, 2017 and March 13, 2017, representatives of Yunfeng and representatives of WSGR, on the one hand, and Mr. Zhang and representatives of Kirkland, on the other hand, continued to negotiate such potential post-closing transitional and non-compete arrangements between the Company and Mr. Zhang.

        On February 24, 2017, a representative of the Special Committee and a representative of Yunfeng held an in-person meeting to discuss the updates to the Yunfeng Proposal, during which such representative of Yunfeng noted that, following the letters exchanged with the Special Committee in January of 2017 and in the interest of expediting the overall process and timetable, Yunfeng had commenced preliminary discussions with members of the Company's management and their legal advisors regarding certain potential arrangements between Yunfeng and such members of management if the Yunfeng Proposed Transaction were to be consummated, including among other matters, potential non-compete obligations to be undertaken by such members of management. Yunfeng requested that the Special Committee waive the applicability of the Company's Rights Agreement to allow Yunfeng to obtain support from the Company's key shareholders, including Mr. Zhang, with respect to the proposed transactions, if such discussions advanced to a more definitive stage.

        Also, on February 24, 2017, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. A member of the Special Committee updated the Special Committee on the recent discussion with a representative of Yunfeng. The Special Committee noted Yunfeng's request that Yunfeng be permitted to obtain support from the Company's key shareholders and concluded that the Special Committee would not grant Yunfeng a waiver to the Rights Agreement before the Special Committee and Yunfeng reached final agreement on the terms of the Yunfeng Proposed Transaction. The Special Committee also discussed certain key factors in its evaluation of Yunfeng Proposed Transaction, noting the importance of the proposed offer price and the certainty of deal consummation. Representatives of J.P. Morgan reported to the Special Committee the results of the market check conducted by J.P. Morgan and updates from conversations between representatives of J.P. Morgan and certain significant shareholders.

        On March 29, 2017, representatives of the Special Committee and representatives of Yunfeng held an in-person meeting during which representatives of Yunfeng provided updates on Yunfeng's

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discussions with the Company's management regarding certain potential post-closing transitional and non-compete arrangements and noted that such discussions remained at a preliminary stage.

        On June 19, 2017, representatives of the Special Committee requested a further meeting with representatives of Yunfeng to discuss updates regarding Yunfeng's ongoing preliminary discussions with members of the Company's management. The representatives of Yunfeng noted to the representatives of the Special Committee that while some progress had been made, both the Company's management and Yunfeng would need additional time to resolve key outstanding differences.

        Throughout the remainder of 2017, the Special Committee and its advisors, on the one hand, and Yunfeng and its advisors, on the other hand, continued to meet in person and telephonically to discuss updates to the Yunfeng Proposal. Members of the Special Committee also met periodically with representatives of Yunfeng telephonically and in person to receive updates regarding discussions between Mr. Zhang and Yunfeng, discussions between other members of Company's management and Yunfeng, and Yunfeng's proposed next steps, as well as to negotiate the offer price and other terms of the Yunfeng Proposed Transaction and discuss milestones and deadlines for various outstanding workstreams. During this time, Yunfeng substantially completed its due diligence investigation with respect to the Company in connection with the Yunfeng Proposed Transaction, engaged in preliminary discussions with Mr. Zhang with regards to the possibility of Mr. Zhang's support for the Yunfeng Proposed Transaction and, at the same time, continued to represent to the Special Committee and its advisors that Yunfeng remained committed to pursuing a potential transaction with the Company.

        During this period, representatives of Yunfeng also provided updates to representatives of J.P. Morgan regarding the Yunfeng Proposal, including the outstanding terms under negotiation between Yunfeng and Mr. Zhang. During this meeting, representatives of Yunfeng confirmed to representatives of J.P. Morgan that Yunfeng continued to be interested in a potential transaction with the Company.

        On September 25, 2017, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. The Special Committee discussed certain conversations between representatives of the Special Committee and representatives of Yunfeng during which representatives of Yunfeng had noted that Yunfeng and its external advisors had substantially completed their due diligence of the Company, Yunfeng had received inquiries from certain potential investors (including potential strategic investors) who expressed possible interest in joining Yunfeng's investment consortium, Yunfeng might lower its offer price to an unspecified amount as a result of its review of the Company's financial and operating results, and Yunfeng had continued its preliminary discussions with Mr. Zhang regarding Mr. Zhang's potential support for the Yunfeng Proposed Transaction. The Special Committee also discussed, among other matters, the fact that certain outstanding convertible loans of the Company would mature at the end of the calendar year and that the Company was simultaneously pursuing alternative methods, other than the consummation of the Yunfeng Proposed Transaction, to address such outstanding convertible loans. After discussion, the Special Committee agreed that it should send a formal letter to Yunfeng requesting a detailed update from Yunfeng on the status of its evaluation of the Yunfeng Proposed Transaction and discussions between Yunfeng and Mr. Zhang, and instructed representatives of Simpson Thacher to begin preparation of such letter.

        On September 26, 2017, a representative of the Special Committee and representatives of Yunfeng held an in-person meeting in Shanghai. During the meeting, representatives of Yunfeng provided a general status update on various work streams with respect to the Yunfeng Proposed Transaction. The representative of the Special Committee expressed the Special Committee's disappointment with the prolonged negotiation process with Yunfeng.

        In October 2017, representatives of J.P. Morgan held a teleconference with representatives of Yunfeng who confirmed that Yunfeng remained interested in proceeding with the Yunfeng Proposed Transaction, but would require support from Mr. Zhang before it would be willing to further proceed.

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        The Special Committee held telephonic meetings on October 3, 2017, October 11, 2017 and October 19, 2017, at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. At each of these meetings, the Special Committee discussed, among other matters, updates regarding the status of discussions between, and the outstanding terms under negotiation between, representatives of Yunfeng and Mr. Zhang in connection with Mr. Zhang's potential support of the Yunfeng Proposed Transaction, the message from Yunfeng that it needed opportunities to meet with Mr. Zhang before it could provide a detailed update on its evaluation of the Yunfeng Proposed Transaction, the likelihood such outstanding issues between Yunfeng and Mr. Zhang would be resolved, and the challenges Yunfeng would face if it were to proceed with the Yunfeng Proposed Transaction without voting support from Mr. Zhang. In addition, at the October 19, 2017 meeting, the Special Committee discussed the message received by both members of the Special Committee as well as representatives of J.P. Morgan from representatives of Yunfeng that Yunfeng remained strongly interested in pursuing the Yunfeng Proposed Transaction, but was not willing to proceed without support from Mr. Zhang. The Special Committee also discussed the potential adverse impact to the Company of a termination of the going private process and certain potential advantages to the Yunfeng Proposed Transaction, depending on the ultimate price and other material terms, and after such discussion, the Special Committee instructed representatives of Simpson Thacher to send to Yunfeng a formal letter requesting a detailed update from Yunfeng on the status of its evaluation of the Yunfeng Proposed Transaction and discussions between representatives of Yunfeng and Mr. Zhang regarding his potential support for the Yunfeng Proposed Transaction.

        In late October 2017, Simpson Thacher, on behalf of the Special Committee, sent to Yunfeng a formal letter dated October 20, 2017 requesting a detailed update from Yunfeng on the status of its evaluation of the Yunfeng Proposed Transaction and discussions between representatives of Yunfeng and Mr. Zhang regarding his potential support for the Yunfeng Proposed Transaction.

        On October 29, 2017, representatives of the Special Committee and representatives of Yunfeng met telephonically to discuss the October 20, 2017 letter from the Special Committee and Yunfeng's intention to respond to such letter in writing on or prior to November 3, 2017.

        On November 1, 2017, Yunfeng sent to the Special Committee a formal letter response to the Special Committee's request for a status update in its letter dated October 20, 2017. Yunfeng's response stated that, notwithstanding extensive efforts over the course of the past year, Yunfeng had been unable to reach agreement with certain members of the Company's management team regarding certain non-compete and retention arrangements and, thus, there was not sufficient comfort to Yunfeng to proceed under the original proposal due to post-closing operational risks. Yunfeng's response further stated that Yunfeng remained in dialogue with relevant stakeholders and that Yunfeng and its advisors were hopeful and committed to working out an alternative transaction structure and would provide an updated proposal to the Special Committee as soon as possible.

        On November 7, 2017, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. During the meeting, the Special Committee discussed the November 1, 2017 letter and certain verbal updates from representatives of Yunfeng that the representatives of Yunfeng and Mr. Zhang would be meeting again within the next week to continue discussions. The Special Committee discussed and agreed that it would not be desirable to terminate the Company's going private process prematurely if Yunfeng remained committed to pursuing a transaction with the Company and Yunfeng and Mr. Zhang continued to negotiate regarding Mr. Zhang's potential support for the Yunfeng Proposed Transaction.

        On November 29, 2017, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. A member of the Special Committee provided an overview of the discussion of a recent Board meeting regarding the Company's debt obligations, including its convertible loans. The Special Committee discussed whether to extend

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the Rights Agreement expiration date for another year. The Special Committee discussed, among other matters, the risk that the Company would be unable to repay its convertible loans due in December 2017 and the potential significant negative impact on the price of the Company's securities and to the Company's shareholders in such circumstances, the vulnerability of the Company in the face of immediate risks that the Company's competitors or other third parties may attempt a takeover of the Company at a depressed price, the continuation of discussions with Yunfeng with respect to the Yunfeng Proposed Transaction, and the ability of the Special Committee to redeem the rights and amend the Rights Agreement. Following discussion, the Special Committee approved the extension of the Rights Agreement expiration date for one year.

        On January 9, 2018, a representative of the Special Committee and a representative of Yunfeng held an in-person meeting in San Francisco to discuss the updates to the Yunfeng Proposed Transaction. During the meeting, the representative of Yunfeng indicated Yunfeng's willingness to consider alternative transaction structures in which members of the Company's management team, including Mr. Zhang and possibly other members of the Company's management team, would retain a portion of their existing ownership in the Company. The representative of Yunfeng also inquired regarding the status of the Company's latest debt maturity schedule, cash flow requirements and whether the Board would consider an interim capital injection, such as an equity issuance or convertible bond issuance.

        On January 24, 2018, a representative of the Special Committee and a representative of Yunfeng held a telephonic meeting to discuss the updates to the Yunfeng Proposed Transaction, including the status of discussions between representatives of Yunfeng and Mr. Zhang. During the meeting, the representative of Yunfeng indicated that Yunfeng had not reached any agreement with Mr. Zhang among the various alternatives evaluated.

        On January 29, 2018, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. The Special Committee discussed, among other matters, the feedback from the representative of Yunfeng at the January 24, 2018 meeting, the likelihood that an agreement could be reached with respect to the Yunfeng Proposal, the potential strategic alternatives available to the Company (including maintaining the Company's current status as a public company), and the extensions of the convertible loans maturity dates obtained by the Company. After discussion, the Special Committee determined to issue a final deadline to Yunfeng and instructed Simpson Thacher to prepare a formal letter to be sent to representatives of Yunfeng to request a written legally binding offer from Yunfeng.

        On February 7, 2018, a representative of the Special Committee and a representative of Yunfeng held an in-person meeting in San Francisco to further discuss the latest updates in connection with the Yunfeng Proposed Transaction and the overall transaction timetable. During the meeting, the representative of the Special Committee requested that Yunfeng provide detailed updates in writing to the Special Committee as soon as possible regarding the status of its evaluation and willingness to continue to explore the terms of a potential transaction.

        On February 9, 2018, Simpson Thacher, on behalf of the Special Committee, sent to Yunfeng a formal letter requesting a written legally binding offer from Yunfeng by 5:00 p.m. on February 28, 2018.

        On February 13, 2018, following an internal discussion, Yunfeng contacted Alibaba to discuss the possibility of forming a consortium to acquire the Company. Prior to this, Alibaba had not been a participant in the Yunfeng Proposed Transaction.

        On February 28, 2018, in response to the February 9, 2018 letter, the Special Committee received from Yunfeng and Alibaba a proposal letter that proposed a "going-private" transaction to acquire all of the Shares and ADSs, through a wholly-owned vehicle, in an all-cash transaction for US$20.00 per ADS (such proposal, the "Yunfeng and Alibaba Proposal", and such going-private transaction, the

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"Transactions"). Subject to the terms and conditions set forth in the February 28, 2018, including (i) Yunfeng and Alibaba being granted access to conduct bring-down due diligence to their reasonable satisfaction, (ii) the terms and conditions set forth in the draft merger agreement attached to the letter being accepted by the Company to Yunfeng and Alibaba's reasonable satisfaction, and (iii) the Company's management team being cooperative during the deal process and there being no unreasonable actions to object, undermine or delay the Transactions, the Yunfeng and Alibaba Proposal constituted a legally binding offer from Yunfeng and Alibaba and superseded all previous offers or proposals from Yunfeng. The Yunfeng and Alibaba Proposal provided that it would expire on March 16, 2018 unless extended by Yunfeng and Alibaba. The Yunfeng and Alibaba Proposal also stated that Yunfeng and Alibaba expected to fund the Transactions with 100% of equity capital and may introduce reputable strategic partners and financial investors to participate in the equity financing of the Transactions.

        On March 1, 2018, Simpson Thacher circulated to the Special Committee a summary of the Yunfeng and Alibaba Proposal and a summary of key issues in the draft merger agreement attached to the Yunfeng and Alibaba Proposal (which included, among other issues, termination fee amounts and termination fee triggers, certain representations and warranties, certain closing deliverables, and certain closing conditions, noting that the draft was identical to the October 25, 2016 draft received from WSGR except for some minor changes and the addition of two additional conditions to closing related to dissenting shares and the Company's convertible loans.

        On March 3, 2018, representatives of J.P. Morgan and representatives of Yunfeng held a telephonic meeting to discuss the Yunfeng and Alibaba Proposal, during which representatives of Yunfeng confirmed that both Yunfeng and Alibaba were committed to the Yunfeng and Alibaba Proposal.

        On March 4, 2018, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. The Special Committee discussed, among other matters, the terms and conditions of the Yunfeng and Alibaba Proposal, the open issues to the draft merger agreement attached to the February 28, 2018 proposal letter which were set forth in the summary of key issues circulated by Simpson Thacher to the Special Committee on March 1, 2018, and the workstreams to be completed in connection with the Yunfeng and Alibaba Proposal, including facilitating Yunfeng and Alibaba's bring-down due diligence process, negotiating the merger agreement, coordinating with the Company's management to prepare updated financial projections for the Company and conducting a creditworthiness analysis on Yunfeng and Alibaba. The Special Committee also discussed the importance of Mr. Zhang's support, given Mr. Zhang's voting power in the Company, to consummate the Transactions.

        On March 5, 2018, representatives of J.P. Morgan, Yunfeng and Alibaba held a teleconference to discuss the requirements for Yunfeng and Alibaba's due diligence investigation with respect to the Company. Representatives of J.P. Morgan requested Yunfeng and Alibaba to send their due diligence request lists as soon as possible to facilitate the Company's preparation of the information.

        On March 6, 2018, representatives of Simpson Thacher and representatives of WSGR held a teleconference to discuss process and next steps in connection with the Yunfeng and Alibaba Proposal. Following the call on March 6, 2018, Simpson Thacher sent to WSGR an addendum to the non-disclosure agreement, dated June 11, 2016, by and between the Company and Yunfeng, to be executed by Yunfeng and Alibaba, which extended the expiration date of the existing non-disclosure agreement (including the standstill provision therein) until one year from the date of execution of the addendum.

        On March 8, 2018 and March 9, 2018, WSGR sent to Simpson Thacher and J.P. Morgan legal due diligence request lists on behalf of Yunfeng and Alibaba.

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        Also on March 9, 2018, Yunfeng and Alibaba engaged Fangda Partners ("Fangda") to serve as their PRC legal counsel in connection with the Yunfeng and Alibaba Proposal. On the same day, representatives of Yunfeng and Mr. Zhang conducted preliminary discussions with respect to the possible interest of contain member of the Company's management team in potential rollover arrangements. During the discussions, the representatives of Yunfeng reiterated the commitments made by Yunfeng and Alibaba in the February 28, 2018 letter from Yunfeng and Alibaba to the Special Committee, in which Yunfeng and Alibaba (i) described the terms of the Yunfeng and Alibaba Proposal and (ii) established Yunfeng and Alibaba's commitment to pursue a possible transaction within a defined time frame. Mr. Zhang indicated that both Yunfeng and himself needed to consult with legal advisors on the suitability of more specific discussions given the Rights Agreement, which was extended in November 2017 and still in effect. Yunfeng, Alibaba and Mr. Zhang agreed that, even if members of the Company's management were to roll over their Shares, the negotiation of the offer price should remain a bilateral discussion between Yunfeng and Alibaba, on the one hand, and the Special Committee, on the other hand, without involvement from the Company's management team, but that if Yunfeng, Alibaba and Mr. Zhang proceeded to engage in more specific discussions with regards to potential rollover arrangements, Yunfeng and Alibaba would need to re-confirm with Mr. Zhang his interest in potentially rolling over his shares each time an adjustment was made to the offer price.

        On March 11, 2018 and March 12, 2018, Yunfeng and Alibaba sent to J.P. Morgan their financial due diligence request lists.

        On March 12, 2018, Yunfeng reached out to Mr. He to obatin Mr. He's view regarding the Yunfeng and Alibaba Proposal.

        On the morning of March 12, 2018, representatives of the Special Committee and representatives of Yunfeng held a telephonic meeting, during which representatives of Yunfeng informed representatives of the Special Committee that Yunfeng and Alibaba were in preliminary discussions with Mr. Zhang and Mr. He to determine their potential support for the Yunfeng and Alibaba Proposal and potential rollover arrangements in connection therewith. During the meeting, representatives of Yunfeng also requested that the Special Committee grant Yunfeng and Alibaba a waiver under the Rights Agreement in the event that the discussions with Mr. Zhang and Mr. He proceeded to a more advanced stage.

        Early in the afternoon on March 12, 2018, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. The Special Committee discussed, among other things, updates to the Yunfeng and Alibaba Proposal, including Yunfeng and Alibaba's expectation that Mr. Zhang and Mr. He would ultimately agree to support, and enter into rollover arrangements in connection with, the Yunfeng and Alibaba Proposal if approved by the Special Committee. The Special Committee discussed and agreed that, if Mr. Zhang and Mr. He were to agree to support the Yunfeng and Alibaba Proposal and participate in rollover arrangements in connection thereto, the certainty of consummation of the Transactions would be significantly increased, and Yunfeng and Alibaba might be willing to agree to a higher offer price. The Special Committee discussed Yunfeng and Alibaba's inquiries about a potential waiver under the Rights Agreement, and following discussion, agreed that the Special Committee would waive the applicability of the Rights Agreement with respect to such support and rollover arrangements only after all transaction documents had been finalized and the Special Committee was prepared to contemporaneously approve the Transactions.

        During the course of the afternoon of March 12, 2018, representatives of Simpson Thacher participated in a number of separate telephone calls with each of representatives of Davis Polk, international legal counsel to the Company, representatives of WSGR and representatives of Yunfeng to discuss the possibility that Mr. Zhang and Mr. He would agree to support the Yunfeng and Alibaba

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Proposal and potentially enter into rollover arrangements with Yunfeng and Alibaba. Representatives of Simpson Thacher notified each of representatives of Davis Polk and representatives of WSGR that the Special Committee did not intend to waive the applicability of the Rights Agreement to allow Yunfeng and Alibaba to enter into any agreements with Mr. Zhang or Mr. He in connection with the Yunfeng and Alibaba Proposal unless and until all transaction documents were finalized and the Special Committee was prepared to contemporaneously approve the Transactions. Representatives of Simpson Thacher also informed representatives of WSGR that the Company intented to publicly announce its receipt of the Yunfeng and Alibaba Proposal.

        Later in the afternoon on March 12, 2018, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. Representatives of Simpson Thacher updated the group regarding their conversations with representatives of Davis Polk, representatives of WSGR and representatives of Yunfeng and discussed the Special Committee's options with regard to the Rights Agreement. The Special Committee re-confirmed that it was not willing to grant any waiver of the Rights Agreement unless such waiver was being granted contemporaneously with an approved transaction. The Special Committee further discussed the need to publicly announce the Company's receipt of the Yunfeng and Alibaba Proposal in light of, among other factors, the substantial increase in the trading volume of the Company's ADSs and risks of leaks regarding the Yunfeng and Alibaba Proposal.

        During the early evening on March 12, 2018, the Board held a telephonic meeting to discuss the Company's third quarter earnings release. At the Board meeting, representatives of the Special Committee received verbal confirmation from each of Mr. Zhang and Mr. He that such individual had been in preliminary conversations with Yunfeng and Alibaba with respect to potential support and rollover arrangements in connection with the Yunfeng and Alibaba Proposal and would be willing to consider agreeing to such arrangements, pending further discussions with Yunfeng and Alibaba and the Special Committee.

        Also, on March 12, 2018, Simpson Thacher, on behalf of the Special Committee, sent WSGR a request for extension of the Yunfeng and Alibaba Proposal noting that Yunfeng and Alibaba had not yet signed the addendum to the June 11, 2016 non-disclosure agreement and confirming that the Special Committee was not willing to grant a waiver of the Rights Agreement at this time.

        Following the Board meeting, on March 12, 2018, the Company issued a press release announcing the receipt of the Yunfeng and Alibaba Proposal and furnished such press release as an exhibit to a Current Report on Form 6-K.

        Following the Company's press release, Boyu Capital Advisory Co. Limited ("Boyu Capital") expressed to Yunfeng its interest to participate in the Transactions as a potential equity investor.

        Later on March 12, 2018, the Company entered into an addendum to the June 11, 2016 non-disclosure agreement with Yunfeng, Alibaba and Boyu Capital, pursuant to which each of Yunfeng, Alibaba and Boyu Capital agreed to customary standstill provisions. Following execution of the NDA, the Company began to provide Yunfeng and Alibaba with information in regards to their due diligence requests.

        Shortly after midnight on March 13, 2018, WSGR, on behalf of Yunfeng and Alibaba, sent to Simpson Thacher a request that the Special Committee waive the applicability of the Rights Agreement with respect to support and rollover arrangements between Yunfeng and Alibaba, on the one hand, and Mr. Zhang and Mr. He, on the other hand, as soon as possible to allow Yunfeng and Alibaba to finalize terms and enter into binding agreements with regards to support and rollover arrangements with Mr. Zhang and Mr. He. WSGR also confirmed, on behalf of Yunfeng and Alibaba, that Yunfeng and Alibaba were willing to extend the Yunfeng and Alibaba Proposal to 5:00 p.m. on March 19, 2018.

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        Later that night, representatives of Simpson Thacher sent to representatives of WSGR a revised merger agreement reflecting the Special Committee's positions on various issues in the draft merger agreement, including, among other issues, the termination fee amounts and termination fee triggers, the closing condition relating to dissenting shares, certain other closing conditions and certain thresholds in the representations, warranties and covenants, a form of equity commitment letter to be entered into by each of the sponsors, and a form of limited guarantee to be entered into by each of the guarantors.

        On March 14, 2018, the Special Committee had a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. The Special Committee discussed, among other matters, the request from Yunfeng and Alibaba that the Special Committee waive the applicability of the Rights Agreement and possible responses by the Special Committee, including potentially granting a short-term limited waiver. After discussion, the Special Committee reaffirmed that it would not grant the requested waiver at such time. During the meeting, representatives of J.P. Morgan reported to the Special Committee that the Company's management was working to prepare updated financial projections for the Special Committee's review. The Special Committee discussed the outstanding workstreams with respect to the Yunfeng and Alibaba Proposal and agreed that it would be very challenging to complete the evaluation of the Yunfeng and Alibaba Proposal and execute a merger agreement by March 19, 2018. The Special Committee instructed representatives of Simpson Thacher to communicate to Yunfeng and Alibaba that (i) the Special Committee did not object to Yunfeng and Alibaba having preliminary discussions with Mr. Zhang and Mr. He regarding their potential support for the Yunfeng and Alibaba Proposal, but was not prepared to provide a waiver to the Rights Agreement at this time, and (ii) the Special Committee requested an extension of the Yunfeng and Alibaba Proposal until March 26, 2018 to complete its evaluation of the Yunfeng and Alibaba Proposal.

        After the meeting on March 14, 2018, Simpson Thacher, on behalf of the Special Committee, communicated to representatives of WSGR the Special Committee's decision that it did not object to Yunfeng and Alibaba having preliminary discussions with Mr. Zhang and Mr. He regarding their potential support for the Yunfeng and Alibaba Proposal, but it would not grant a waiver of the Rights Agreement at such time and the Special Committee's request that the Yunfeng and Alibaba Proposal be extended until the end of the day on March 26, 2018.

        On March 15, 2018, WSGR sent to Simpson Thacher a revised merger agreement reflecting Yunfeng and Alibaba's positions on various issues in the draft merger agreement. Later on March 15, 2018, Simpson Thacher sent to the Special Committee the revised merger agreement received from WSGR and a summary of the key open issues, including issues related to termination fee triggers, termination fee amounts, the closing condition relating to dissenting shares, the closing condition related to the Company's convertible loans, and certain threshold in the representations, warranties and covenants.

        Throughout the course of the day on March 16, 2018, representatives of Simpson Thacher and representatives of WSGR held teleconferences and exchanged e-mails regarding the revised merger agreement received from WSGR. On the same day, representatives of Yunfeng and representatives of the Company held a teleconference to discuss certain provisions of the merger agreement related to operational restrictions on the Company between the signing of the merger agreement and the closing of the Transaction and the acceleration of unvested options in accordance with their terms upon the closing of the Transaction.

        Also, between March 12, 2018 and March 26, 2018, Mr. Zhang, representatives of Yunfeng and representatives of Alibaba had several meetings to discuss potential support and rollover arrangements in connection with the Yunfeng and Alibaba Proposal. Among other topics, the parties discussed the potential terms upon which Mr. Zhang might be willing to support the Yunfeng and Alibaba Proposal, the possibility for Mr. Zhang to roll over part of his stake in the Company in connection with the

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proposed transaction, and the potential governance structure of the Company following such a transaction.

        On March 17, 2018, representatives of the Special Committee and representatives of Yunfeng and Alibaba held a teleconference to discuss the Yunfeng and Alibaba Proposal. During the call, representatives of Yunfeng and Alibaba verbally communicated Yunfeng and Alibaba's intent to extend the deadline of the Yunfeng and Alibaba Proposal until sometime during the day on March 24, 2018 if the open issues in the merger agreement, except for certain critical open issues, were resolved by the end of the day on March 19, 2018 to Yunfeng and Alibaba's satisfaction. Representatives of Yunfeng and Alibaba also notified the representatives of the Special Committee that they had dropped their request for a waiver of the applicability of the Rights Agreement at such time. The parties also discussed the outstanding key issues in the merger agreement, including, among other issues, the termination fee amounts and the termination fee triggers.

        Also, on March 17, 2018, WSGR sent to Simpson Thacher a revised form of limited guarantee and a revised form of equity commitment letter. Later on the same day, WSGR sent to Kirkland the initial draft of a support agreement, which was proposed to be entered into among the Rollover Shareholders, Mr. Zhang, Parent and Holdco simultaneously with the execution of the merger agreement.

        Later in the evening on March 17, 2018, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. A member of the Special Committee provided an update on the discussions with representatives of Yunfeng and Alibaba. The Special Committee discussed the proposed expiration date of March 24, 2018 for the Yunfeng and Alibaba Proposal and concluded that this deadline would not provide the Special Committee with sufficient time to negotiate the key terms of and evaluate the Yunfeng and Alibaba Proposal. The Special Committee also noted that the Company would be issuing its third quarter earnings release on Thursday, March 22, 2018 after market close in New York. After discussion, the Special Committee agreed to request that the expiration date of the Yunfeng and Alibaba Proposal be extended until the end of the day on March 26, 2018. During the meeting, representatives of Simpson Thacher reported to the Special Committee on the key outstanding issues in the draft merger agreement, including among others: (i) Yunfeng and Alibaba' acknowledgement that all unvested options would be accelerated upon the closing of the Transaction in accordance with the terms of such options; (ii) termination fee amounts, which the Special Committee had proposed to be 5% and 2.5% of the transaction value for the Parent reverse termination fee and Company termination fee, respectively, and Yunfeng and Alibaba had proposed to be 3% and 1.5% of the transaction value for the Parent termination fee and Company termination fee, respectively; (iii) a reverse termination fee trigger, proposed by the Special Committee, to be paid to the Company in the event of termination due to a government injunction; (iv) the condition precedent, proposed by Yunfeng and Alibaba, that dissenting shares comprise no more than 10% of outstanding shares; and (v) the condition precedent, proposed by Yunfeng and Alibaba, that the Company's convertible loans be amended or repaid prior to closing.

        Shortly after midnight on March 17, 2018, Simpson Thacher sent to WSGR a revised merger agreement reflecting the Special Committee's positions on the various issues in the draft merger agreement.

        On March 18, 2018, Simpson Thacher sent to WSGR a revised form of equity commitment letter and a revised form of limited guarantee.

        Later in the afternoon of March 18, 2018, WSGR, on behalf of Yunfeng and Alibaba, sent to Simpson Thacher a written confirmation that Yunfeng and Alibaba would be willing to extend the Yunfeng and Alibaba Proposal to 12:00 p.m. on March 24, 2018 on the condition that all outstanding legal issues on the merger agreement were resolved on or before March 19th, with the exception of certain matters which may require further deliberation by the Special Committee, including among

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others, the valuation of the Company, termination fees, treatment of the Company's convertible loans and the closing condition relating to dissenting shares.

        During the night of March 18, 2018, representatives of the Special Committee and representatives of Yunfeng had a call to discuss the offer price and certain open issues to the merger agreement, including among others, termination fee triggers, the closing condition relating to dissenting shares, and certain other closing conditions.

        Later during the night of March 18, 2018, WSGR sent to Simpson Thacher a revised merger agreement, a revised form of equity commitment letter, and a revised form of limited guarantee. WSGR also sent to Simpson Thacher a preliminary draft of a support agreement, subject to further discussions with the Rollover Shareholders, which was proposed to be entered between Yunfeng and Alibaba and the Rollover Shareholders simultaneously with the execution of the merger agreement.

        Also on March 18, 2018, Alibaba informed Yunfeng that Taobao China Holding Limited would provide the equity commitment under the equity commitment letter in connection with Alibaba's commitment under the Yunfeng and Alibaba Proposal.

        During the morning of March 19, 2018, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were presented. A representative of the Special Committee provided an update on the price and other negotiations with Yunfeng and Alibaba. Representatives of Simpson Thacher updated the Special Committee on the open issues in the transaction documents, which included, among other issues, termination fee amounts, termination fee triggers, the closing condition relating to dissenting shares, and certain other closing conditions and noted WSGR's confirmation that, subject to further discussions with the Rollover Shareholders, Yunfeng and Alibaba expected that Rollover Shares would account for approximately 25% of the total issued and outstanding Shares and approximately 43% of the total voting power of such Shares if the transactions contemplated by the Yunfeng and Alibaba Proposal were approved by the Special Committee. Following discussion, Special Committee agreed that, in light of the expected number of Rollover Shares, the Special Committee would propose to include in the merger agreement a "majority of the minority" requirement to obtain the approval of a majority of the Company's shareholders who were unrelated with the Rollover Shareholders, Yunfeng and Alibaba with respect to the Transactions and would propose that the support agreement between Yunfeng and Alibaba and the Rollover Shareholders should terminate upon a change in the Board's recommendation of the proposed transaction. During the call, representatives of J.P. Morgan also provided an update on the other workstreams, including the status of preparation of the financial projections.

        Later in the day on March 19, 2018, representatives of Simpson Thacher and representatives of WSGR held a telephonic meeting to discuss certain open issues in the draft merger agreement, form of equity commitment letter and form of limited guarantee, as well as the Special Committee's request for an extension of the Yunfeng and Alibaba Proposal to March 26, 2018. Representatives of Simpson Thacher informed representatives of WSGR of the Special Committee's request for a "majority of the minority" vote requirement, in light of the voting power of the Rollover Shareholders, and the Special Committee's request for termination of the support agreement between Yunfeng and Alibaba and the Rollover Shareholders upon a change in the Board's recommendation of the proposed transaction.

        Later in the afternoon of March 19, 2018, WSGR sent a draft form of limited guarantee to Kirkland.

        During the evening of March 19, 2018, Simpson Thacher sent to WSGR a revised merger agreement reflecting the Special Committee's positions on the open issues in the draft merger agreement, a revised form of equity commitment letter, and a revised form of limited guarantee.

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        Later on the night of March 19, 2018, WSGR, on behalf of Yunfeng and Alibaba, sent to Simpson Thacher a written confirmation that Yunfeng and Alibaba would be willing to extend the Yunfeng and Alibaba Proposal to 11:59 p.m. on March 24, 2018.

        Over the course of March 20, 2018 and March 21, 2018, the Special Committee and its advisors, on the one hand, and Yunfeng and Alibaba and their advisors, on the other hand, continued to communicate telephonically and via e-mail regarding certain open issues, including the confirmation of the legal entities entering into the various transaction documents and required regulatory filings and approvals. As part of these communications, representatives of WSGR informed representatives of Simpson Thacher that Yunfeng and Alibaba intended to potentially syndicate their equity commitments to other financial sponsors between the execution of the merger agreement and the consummation of the proposed transactions, and the parties agreed and acknowledged that any such syndication would require the prior consent of the Special Committee.

        During the night of March 20, 2018, WSGR sent a draft interim investors agreement to Kirkland.

        On March 21, 2018, representatives of the Special Committee and representatives of Yunfeng held a telephonic meeting during which representatives of Yunfeng confirmed that Yunfeng and Alibaba were committed to fully fund their proposed transactions with 100% equity financing, and that Yunfeng and Alibaba's intention to explore potential equity syndication to other financial sponsors between signing and closing would not introduce any additional conditionality to the proposed transactions.

        Also on March 21, 2018, WSGR sent to Kirkland its further comments to the drafts of the support agreement and the interim investors agreement and sent to Mr. He the draft of each of the support agreement, the interim investors agreement and the limited guarantee.

        During the evening of March 21, 2018, the Special Committee held a telephonic meeting at which Mr. Chen and other representatives of the Company, representatives of J.P. Morgan and representatives of Simpson Thacher were present. During this meeting, Mr. Chen reviewed with the Special Committee the Company management's financial projections for the fiscal year ending March 31, 2018 through the fiscal year ending March 31, 2027. Please see "Special Factors—Certain Financial Projections" beginning on page 75 for a summary of these financial projections. The Special Committee discussed with management, among other matters, the key assumptions underlying the financial projections. After discussion, the Special Committee authorized representatives of J.P. Morgan to use and rely on the financial projections prepared by Company management for purposes of J.P. Morgan's financial analysis of the merger and approved the distribution of such financial projections to Yunfeng and Alibaba as part of their due diligence investigation of the Company.

        Immediately after the telephonic meeting with Mr. Chen, the Special Committee, representatives of J.P. Morgan and representatives of Simpson Thacher reconvened the Special Committee's telephonic meeting to discuss updates on the negotiations with Yunfeng and Alibaba. During this call, the Special Committee discussed with representatives of J.P. Morgan certain strategies and arguments for negotiating with Yunfeng and Alibaba for an increase in the offer price.

        In the morning of March 22, 2018, representatives of Simpson Thacher, representatives of WSGR and representatives of Ropes & Gray LLP ("Ropes & Gray"), international legal counsel of Alibaba, held a teleconference to discuss open issues in the draft forms of equity commitment letter and limited guarantee. During the call, the representatives of WSGR and representatives of Ropes & Gray confirmed that they had no further comments on the draft of the limited guarantee distributed by Simpson Thacher on March 19, 2018. Following the call, Simpson Thacher circulated an updated draft of the form of equity commitment letter and a revised draft merger agreement to WSGR.

        During the afternoon of March 22, 2018, representatives of JunHe and representatives of Fangda held a teleconference to discuss PRC law matters related to the Transactions, including potential filings or approvals as well as certain actions to be taken in connection with the Company's VIE entities.

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        Later on the same day, representatives of the Special Committee communicated to representatives of Yunfeng a request to meet with Yunfeng and Alibaba to discuss a potential increase in the offer price. During the call, representatives of Yunfeng and Alibaba stated that Yunfeng and Alibaba were not prepared to increase the offer price, but agreed nonetheless to set up such requested discussion between the Special Committee and Yunfeng and Alibaba for the morning of March 24, 2018.

        In the morning of March 23, 2018, the representatives of WSGR conducted a conference call with a representative of Mr. He to discuss the drafts of the transaction documents, including the support agreement, the interim investors agreement and certain provisions of the merger agreement. On the same date, Mr. He reached out to Yunfeng and discussed the number of shares Mr. He and his affiliates would be permitted to roll over.

        Also in the morning of March 23, 2018, WSGR sent to Simpson Thacher a revised merger agreement and a revised form of equity commitment letter. Also, on March 23, 2018, Simpson Thacher sent to WSGR a draft amendment to the Rights Agreement, and WSGR sent Simpson Thacher its comments on the draft amendment later in the day.

        In the afternoon of March 23, 2018, representatives of Simpson Thacher and representatives of WSGR held a teleconference to discuss certain issues in the draft merger agreement and draft form of equity commitment letter, including, among other issues, (i) whether amendment or repayment of the Company's convertible loans would be a closing condition, (ii) the closing condition related to dissenting shares, (iii) whether a "majority of the minority vote" would be required, (iv) whether Parent would be required to pay a termination fee in the event of termination due to government injunction, (v) the amounts of the termination fees payable by Parent and the Company, respectively, (vi) the conditions in the equity commitment letter and (vii) whether the support agreement would terminate upon a change of recommendation by the Special Committee. Representatives of WSGR also informed representatives of Simpson Thacher that the updated draft support agreement and the draft interim investors agreement were under review by the Rollover Shareholders and their counsel and, thus, could not yet be shared with Simpson Thacher or the Special Committee.

        Later in the afternoon of March 23, 2018, representatives of the Company, representatives of Davis Polk, representatives of Simpson Thacher, representatives of KWM, the PRC legal counsel to the Company, representatives of WSGR and representatives of Fangda, held a teleconference to negotiate the Company's disclosure schedules to the merger agreement and to discuss Yunfeng and Alibaba's ongoing bring-down due diligence efforts.

        Also, in the afternoon of March 23, 2018, representatives of JunHe, representatives of Fangda and representatives of Yunfeng and Alibaba held a teleconference to discuss their respective antitrust analyses with respect to the Yunfeng and Alibaba Proposal, and JunHe provided a summary of its antitrust analysis to the Special Committee. In addition, Yunfeng and Alibaba provided information regarding the commitments of the Yunfeng funds to J.P. Morgan.

        Later in the evening of March 23, 2018, Simpson Thacher sent to WSGR a revised merger agreement and a revised form of equity commitment letter. The key outstanding issues included (i) price, (ii) whether amendment or repayment of the Company's convertible loans would be a closing condition, (iii) the closing condition related to dissenting shares, (iv) whether a "majority of the minority vote" would be required, (iv) whether Parent would be required to pay a termination fee in the event of termination due to government injunction, (vi) the amounts of the termination fees payable by Parent and the Company, respectively, (vii) the conditions in the equity commitment letter, and (viii) the requirement for the support agreement obligations to terminate upon a change of recommendation by the Special Committee.

        During the night of March 23, 2018, the Special Committee held a telephonic meeting at which, representatives of J.P. Morgan and representatives of Simpson Thacher were present. The Special

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Committee and representatives of J.P. Morgan discussed certain strategies and arguments for negotiating a price increase. The Special Committee also discussed, among other things, that Yunfeng and Alibaba had unequivocally stated that they were not prepared to offer a price increase, the absence of any competing offer from other potential buyer since June 2016, and the potential risks and challenges to the Company if it remained as a stand-alone company. Representatives of Simpson Thacher also reviewed with the Special Committee the revised merger agreement sent to WSGR.

        Also on March 23, 2018, Kirkland sent to WSGR its comments to the draft of the support agreement. The comments reflected Mr. Zhang's position on certain outstanding issues in the support agreement, including the number of shares Mr. Zhang and his affiliates would be permitted to roll over.

        At 9:30 am on March 24, 2018, representatives of the Special Committee and representatives of Yunfeng and Alibaba held a telephonic meeting to discuss the Special Committee's request for an increase in the offer price. During the meeting, the Special Committee negotiated for a price increase and presented to Yunfeng and Alibaba the Special Committee's reasons for requesting such price increase. Yunfeng and Alibaba acknowledged the Special Committee's arguments and responded to the Special Committee's concerns but did not agree to any price increase during the meeting.

        After the call and over the course of the next few hours, representatives of the Special Committee continued to contact representatives of Yunfeng and Alibaba to negotiate for a potential price increase. During the afternoon on March 24, 2018, representatives of Yunfeng and Alibaba agreed, after obtaining their internal approval, to increase their offer price to US$41.00 per Share or US$20.50 per ADS, which the representatives of Yunfeng and Alibaba maintained was their best offer.

        In the afternoon of March 24, 2018, Kirkland sent to WSGR its comments to the draft interim investors agreement, which reflected Mr. Zhang's position on certain outstanding issues in the interim investments agreement, including the decision making mechanism within the Buyer Group with respect to the proposed transaction, circumstances under which new investors may be admitted and existing investors may be terminated, and expense sharing mechanisms within the Buyer Group.

        Throughout the day on March 24, 2018, Simpson Thacher, WSGR, KWM and Fangda continued to negotiate the remaining issues in the merger agreement. During these discussions, representatives of WSGR indicated to representatives of Simpson Thacher that Yunfeng and Alibaba were willing to drop their request for a closing condition which required the amendment or repayment of the Company's outstanding convertible loans.

        Also on March 24, 2018, WSGR and Kirkland continued to exchange comments on the draft form of limited guarantee.

        During the evening of March 24, 2018, the Special Committee held a telephonic meeting at which, representatives of J.P. Morgan and representatives of Simpson Thacher were present. Members of the Special Committee provided an update on the various conversations between the members of the Special Committee and the representatives of Yunfeng and Alibaba throughout the day in connection with the Special Committee's request for a price increase. The members of the Special Committee discussed, among other matters, their views on the potential risks and benefits of the proposed sale of the Company compared to the potential risks and benefits if the Company remained as a stand-alone company, including the risks related to the Company's liquidity position and related challenges with respect to the Company's ability to execute its stand-alone business plan. After discussion, the Special Committee agreed that it would continue to push for a further price increase above Yunfeng and Alibaba's increased offer price of US$41.00 per Share or US$20.50 per ADS.

        During the night of March 24, 2018, in response to a request by Simpson Thacher on behalf of the Special Committee, WSGR, on behalf of Yunfeng and Alibaba, sent to Simpson Thacher a written

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confirmation that Yunfeng and Alibaba would be willing to extend the Yunfeng and Alibaba Proposal to 11:59 p.m. on March 25, 2018.

        Also during the night of March 24, 2018, WSGR sent a revised draft of the support agreement to Kirkland, which reflected Yunfeng and Alibaba's positions on certain outstanding issues in the support agreement, including the number of shares Mr. Zhang and his affiliates would be permitted to roll over.

        Shortly after midnight in the early morning of March 25, 2018, Kirkland sent its comments to the draft support agreement to WSGR, which reflected Mr. Zhang's responses to WSGR's March 24 draft of the support agreement. Also in the early morning of March 25, 2018, WSGR sent its comments to the draft interim investors agreement to Kirkland, which reflected Yunfeng and Alibaba's positions on certain outstanding issues in the interim investors agreement, including circumstances under which new investors may be admitted and existing investors may be terminated.

        Between March 24, 2018 and March 26, 2018, the members of the Buyer Group and their legal counsels continued to discuss and exchange comments on the draft merger agreement, the draft form of equity commitment letter and the draft form of limited guarantee, and continued to negotiate and finalize buyer group documents, including the interim investors agreement and the support agreement. During these discussions, Yunfeng, Alibaba and Mr. Zhang reached agreement on certain issues in the support agreement and the interim investors agreement, including the number of shares Mr. Zhang and his affiliates would be permitted to roll over, and certain mechanisms to allocate the total required equity commitment among members of the Buyer Group.

        In the morning of March 25, 2018, representatives of Simpson Thacher, representatives of WSGR, representatives of Ropes & Gray and representatives of Alibaba held a teleconference to discuss certain open issues in the draft merger agreement, including among other issues (i) whether the threshold in the closing condition related to dissenting shares would be 10% or 20%, (ii) whether Parent would be required to pay a termination fee in the event of termination due to a government injunction, (iii) whether a "majority of the minority" vote would be required, (iv) whether the support agreement between Yunfeng and Alibaba and the Rollover Shareholders would terminate upon a change in the Board's recommendation of the Transactions, and (v) the amounts of the termination fees.

        Later in the morning on March 25, 2018, the Special Committee held a telephonic meeting at which representatives of J.P. Morgan and representatives of Simpson Thacher were present. Members of the Special Committee updated the group regarding the numerous conversations over the last 48 hours between representatives of the Special Committee and representatives of Yunfeng and Alibaba, during which representatives of the Special Committee negotiated for a further price increase and, after extensive negotiations, Yunfeng and Alibaba ultimately agreed to a final price increase to US$41.20 per Share or US$20.60 per ADS. Each member of the Special Committee expressed his or her views on the increased offer price, noted that both Yunfeng and Alibaba stated that they would not agree to any further price increase, and discussed the potential risk that the Company would lose the opportunity for shareholders if the Special Committee refused to accept the final price from Yunfeng and Alibaba. Following discussion, the Special Committee instructed representatives of J.P. Morgan to make a presentation to the Special Committee regarding its opinion on the fairness of the offer price at the next Special Committee meeting scheduled for the morning of March 26, 2018. Representatives of Simpson Thacher confirmed that Yunfeng and Alibaba were willing to drop the condition to closing related to the Company's convertible loans and reviewed the antitrust analysis of Yunfeng and Alibaba and their counsel. In addition, representatives of Simpson Thacher updated the Special Committee on the status of the remaining open issues to the merger agreement and the Special Committee provided its feedback on each open remaining open issue, including among other open issues (i) its approval of 15% as the threshold for the condition to closing related to dissenting shares, (ii) its willingness to

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ultimately concede on the Parent termination fee in the event that the merger agreement was terminated due to government injunction, but desire to retain this position until Yunfeng and Alibaba provided further information on their antitrust analysis, (iii) its desire to retain its position on the Parent termination fee of 5.0% of the transaction value and the Company termination fee of 2.5% of the transaction value, and (iv) its willingness to concede the "majority of the minority" vote provision and the requirement for the support agreement obligations to terminate upon a change of recommendation in exchange for the price increase agreed by Yunfeng and Alibaba.

        In the afternoon of March 25, 2018, representatives of Simpson Thacher, representatives of WSGR, representatives of Ropes & Gray, representatives of Fangda, representatives of Yunfeng and representatives of Alibaba held a telephonic meeting to discuss the open issues in the draft merger agreement. Representatives of Fangda reviewed the proposed post-closing acquisition and governance structure of the Buyer Group and the antitrust analysis of Yunfeng and Alibaba and their counsel and agreed to provide a summary of its analysis to Simpson Thacher and JunHe. In addition, during the call, (i) representatives of Simpson Thacher and representatives of WSGR agreed to a 15% maximum threshold for the condition precedent regarding the maximum percentage of dissenting shares, (ii) representatives of Yunfeng and Alibaba confirmed that the Buyer Group was willing to accept a Parent termination fee of 5.0% of the transaction value and a Company termination fee of 2.5% of the transaction value, (iii) representatives of Simpson Thacher confirmed that, in exchange for the price increase, the Special Committee agreed to drop its request for "majority of the minority" vote requirement and termination of the support agreement upon a change in the Board's recommendation of the Transactions. Representatives of WSGR confirmed that the Buyer Group had no further issues on the draft merger agreement other than those discussed, acknowledged that equity syndication by Yunfeng and Alibaba between the execution of the merger agreement and the consummation of the Transactions would require the Special Committee's prior approval, and accepted that any amendments to the equity commitment letters that would be adverse to the rights of the Company thereunder would require the Company's prior written consent. After the call, representatives of WSGR circulated to representatives of Simpson Thacher the revised merger agreement reflecting the agreements between the Special Committee and Yunfeng and Alibaba as discussed on the call.

        Over the course of March 25, 2018, the Special Committee and its advisors, on the one hand, and Yunfeng and Alibaba and their advisors, on the other hand, continued to exchange drafts of the various transaction documents and engage in discussions to resolve the remaining outstanding issues. In parallel, representatives of Yunfeng and Alibaba obtained further confirmation from Mr. Zhang and Mr. He that they remained committed to the rollover arrangements following the final offer price increase, subject to the terms of such rollover arrangement being finalized and agreed among Yunfeng, Alibaba and each of Mr. Zhang and Mr. He, and the terms of the Yunfeng Alibaba Proposed Transaction being finalized and agreed with the Special Committee.

        Later in the night of March 25, 2018, in response to a request by Simpson Thacher on behalf of the Special Committee, WSGR, on behalf of Yunfeng and Alibaba, sent to Simpson Thacher a written confirmation that Yunfeng and Alibaba would be willing to extend the Yunfeng and Alibaba Proposal to 9:00 p.m. on March 26, 2018.

        On March 26, 2018, WSGR sent to Simpson Thacher an initial draft of the interim investor agreement to be entered into by the Buyer Group and a revised draft of the support agreement to be entered into by the Buyer Group.

        On the morning of March 26, 2018, the Special Committee held a telephonic meeting attended by representatives of J.P. Morgan, representatives of Simpson Thacher, representatives of Walkers and representatives of JunHe. Representatives of Walkers reviewed with the Special Committee the directors' fiduciary duties under the laws of the Cayman Islands in connection with their evaluation of the Yunfeng and Alibaba Proposal. Representatives of J.P. Morgan reviewed their presentation

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regarding J.P. Morgan's financial analysis with respect to the consideration to be paid in the merger and then orally delivered to the Special Committee its opinion that, as of the date of such opinion and subject to certain limitations, qualifications and assumptions, the offer price of US$41.20 per Share or US$20.60 per ADS to be paid to the holders of such Shares and ADSs (other than holders of Excluded Shares or Dissenting Shares) in connection with the Yunfeng and Alibaba Proposal is fair, from a financial point of view, to such holders. Representatives of Simpson Thacher reviewed with the Special Committee the key terms of the merger agreement, equity commitment letters, limited guarantees, support agreement and other transaction documents including among others, the structure of the merger, merger consideration, termination rights, termination fee triggers, termination fee amounts, and the conditions to closing for the Transactions. Representatives of Simpson Thacher also reviewed with the Special Committee the antitrust analysis of Yunfeng and Alibaba and their counsels and JunHe's views with respect thereto. After considering the proposed terms of the merger agreement and the presentations of Walkers, Simpson Thacher, JunHe and J.P. Morgan, including receipt of J.P. Morgan's opinion, taking into account the other factors described below under the caption "Reasons for the Merger and Recommendation of the Special Committee and the Board" beginning on page 65, the Special Committee then unanimously (a) determined that the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, on the terms and subject to the conditions set forth in the merger agreement, are fair to and in the best interest of the Company and its shareholders, including the unaffiliated shareholders, (b) declared it advisable for the Company to enter into the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, and (c) recommended that the Board authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger.

        Throughout the day on March 26, 2018, the advisors to the Special Committee and the advisors to Yunfeng and Alibaba continued to finalize the drafts of the various transaction documents.

        In the afternoon of March 26, 2018, the Board held a telephonic meeting, attended by representatives of Davis Polk and representatives of Simpson Thacher, to discuss the Yunfeng and Alibaba Proposal. Each of Mr. Zhang, Mr. He and Ms. Feiyan Huang ("Ms. Huang"), the wife of Mr. Zhang, disclosed his or her interests in the transactions contemplated by the Yunfeng and Alibaba Proposal. Thereafter, the Special Committee presented its recommendation to the Board and representatives of Simpson Thacher reviewed with the Board the key terms of the merger agreement, equity commitment letters, limited guarantees, support agreement and other transaction documents including among others, the structure of the merger, merger consideration, termination rights, termination fee triggers, termination fee amounts, and the conditions to closing for the Transactions. After discussion and considering the proposed terms of the merger agreement and the other transaction agreements, the various presentations of the Special Committee and Simpson Thacher, the fact that J.P. Morgan had delivered its fairness opinion to the Special Committee, and taking into account the other factors described below under the caption "Reasons for the Merger and Recommendation of the Special Committee and the Board" beginning on page 65, the Board (a) determined that the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, on the terms and subject to the conditions set forth in the merger agreement, are fair to, and in the best interests of, the Company and its shareholders, including the unaffiliated shareholders, and declared it advisable for the Company to enter into the transactions contemplated by the merger agreement, including the merger, (b) authorized and approved the execution, delivery and performance of the merger agreement, the plan of merger and the consummation of the transactions contemplated by the merger agreement, including the merger, (c) directed that the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, be submitted to the shareholders of the Company for authorization and approval, and (d) subject to the terms of the merger agreement, resolved to recommend the approval of the merger agreement, the plan of merger and the transactions

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contemplated by the merger agreement, including the merger, to the shareholders of the Company. Each of Mr. Zhang, Mr. He and Ms. Feiyan Huang abstained from voting in light of his or her interests in the transactions contemplated by the merger agreement, including the merger, as a Rollover Shareholder or a related party of a Rollover Shareholder, as applicable.

        After the Board meeting, on March 26, 2018, the Company, Parent and Merger Sub executed the merger agreement and the Company contemporaneously amended its Rights Agreement to waive the applicability of the Rights Agreement with respect to the transactions contemplated by the merger agreement. Concurrently with the execution of the merger agreement, YF Fund III, YF Fund III Parallel and Taobao China executed and delivered to the Company the equity commitment letters, and YF Fund III, YF Fund III Parallel, Taobao China, ShanghaiMed and Top Fortune executed and delivered to the Company the limited guarantees. Also, concurrently with the execution of the merger agreement, the Rollover Shareholders, Mr. Zhang, Mr. He, YF Fund III, YF Fund III Parallel and Taobao China, Holdco, Parent and Merger Sub entered into the interim investors agreement and the Rollover Shareholders, Mr. Zhang, Mr. He, Parent and Holdco entered into the support agreement.

        Shortly thereafter in the evening of March 26, 2018, the Company issued a press release announcing the execution of the merger agreement and the amendment of the Rights Agreement, and furnished such press release as an exhibit to a Current Report on Form 6-K.

        On May 10, 2018, WSGR, on behalf of Yunfeng and Alibaba, informed Simpson Thacher that Yunfeng and Alibaba intended to invite Boyu Capital to join the buyer consortium and allocate to Boyu Capital a $200 million equity commitment from Taobao China, and requested an approval from the Special Committee for inclusion of Boyu Capital into the buyer consortium.

        On May 14, 2018, Boyu Capital informed WSGR that an affiliate of Boyu Capital, Boyu Capital Fund III, L.P., would provide a $200 million equity commitment in connection with the Transactions. Later on the same day, WSGR, on behalf of Boyu Fund III, sent to J.P. Morgan certain information regarding the funds of Boyu Fund III, its structure and creditworthiness.

        On May 22, 2018, representatives of Yunfeng and Mr. Zhang had an in-person meeting to discuss the potential adjustment to the management's rollover arrangements.

        On May 29, 2018, the Special Committee approved the addition of Boyu Fund III as a Sponsor, approved related amendments to the transaction documents and recommended that the Board approve such amendments. Also, on May 29, 2018, the Board held a telephonic meeting, which was attended by representatives of Simpson Thacher, during which the Board approved the addition of Boyu Fund III as a Sponsor and approved related amendments to the transaction documents.

        On May 29, 2018, the Company, Parent and Merger Sub executed an amendment to the merger agreement relating to the addition of Boyu Fund III as a Sponsor thereunder, and the Company amended its Rights Agreement to waive applicability of the Rights Agreement with respect to the addition of Boyu Fund III as a Sponsor. Concurrently with the execution of the amendment to the merger agreement, Boyu Fund III executed and delivered to the Company an equity commitment letter reflecting its equity commitment, and YF Fund III, YF Fund III Parallel and Taobao China executed and delivered to the Company amended and restated equity commitment letters reflecting the updated amounts of their respective equity commitments thereunder. In addition, Boyu Fund III executed and delivered to the Company a limited guarantee reflecting its guaranteed amount thereunder, and YF Fund III, YF Fund III Parallel, Taobao China, ShanghaiMed and Top Fortune executed and delivered to the Company amended and restated limited guarantees reflecting their respective updated guaranteed amounts thereunder, each of which were executed by the Company. On the same day, the interim investors agreement dated as of March 26, 2018 was amended and restated by the Rollover Shareholders, Mr. Zhang, Mr. He, the Sponsors, Holdco, Parent and Merger Sub to admit Boyu Fund III as an investor thereunder. Also on the same day, Rollover Shareholders, Mr. Zhang, Mr. He,

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Parent and Holdco executed an amendment to the support agreement dated as of March 26, 2018 to adjust certain rollover arrangements of the management of the Company.

Reasons for the Merger and Recommendation of the Special Committee and the Board

        At a meeting on March 26, 2018, the Special Committee, after consultation with its financial advisor and legal counsel, unanimously (a) determined that the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, on the terms and subject to the conditions set forth in the merger agreement, are fair to and in the best interest of the Company and its shareholders, including the unaffiliated shareholders, (b) declared it advisable for the Company to enter into the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, and (c) recommended that the Board authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger.

        At a meeting on March 26, 2018, the Board, acting upon the unanimous recommendation of the Special Committee, and after each director duly disclosed his or her interests in the transactions contemplated by the merger agreement, including the merger, as required by the memorandum and articles of associations of the Company as amended to date and the Cayman Islands Companies Law, (a) determined that the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, on the terms and subject to the conditions set forth in the merger agreement, are fair to, and in the best interests of, the Company and its shareholders, including the unaffiliated shareholders, and declared it advisable for the Company to enter into the transactions contemplated by the merger agreement, including the merger, (b) authorized and approved the execution, delivery and performance of the merger agreement, the plan of merger and the consummation of the transactions contemplated by the merger agreement, including the merger, (c) directed that the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, be submitted to the shareholders of the Company for authorization and approval, and (d) subject to the terms of the merger agreement, resolved to recommend the approval of the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, to the shareholders of the Company. At the meeting of the Board on March 26, 2018, each of Mr. Zhang, Mr. He and Ms. Feiyan Huang abstained from voting in light of his or her interests in the transactions contemplated by the merger agreement, including the merger, as a Rollover Shareholder or a related party of a Rollover Shareholder, as applicable.

        In the course of reaching their respective determinations, the Special Committee and the Board considered the following substantive factors and potential benefits of the merger, including the following, which are not listed in any relative order of importance:

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        In addition, the Special Committee and the Board believed that sufficient procedural safeguards were, and are, present to ensure that the merger is procedurally fair to the unaffiliated shareholders and to permit the Special Committee and the Board to represent effectively the interests of such

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shareholders, which procedural safeguards include the following, which are not listed in any relative order of importance:

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        The Special Committee and the Board also considered a variety of potentially negative factors concerning the merger agreement and the merger, including the following, which are not listed in any relative order of importance:

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        The foregoing discussion of information and factors considered by the Special Committee and the Board is not intended to be exhaustive, but includes a number of the factors considered by the Special Committee and the Board. In view of the wide variety of factors considered by the Special Committee and the Board, neither the Special Committee nor the Board found it practicable to quantify or otherwise assign relative weights to the foregoing factors in reaching its conclusions. In addition, individual members of the Special Committee and the Board may have given different weights to different factors and may have viewed some factors more positively or negatively than others. The Special Committee unanimously recommended that the Board authorize and approve, and the Board authorized and approved, the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, based upon the totality of the information presented to and considered by it.

        In reaching its conclusion regarding the fairness of the merger to the Company's shareholders, including the unaffiliated shareholders, and its decision to recommend the authorization and approval of the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, the Special Committee considered financial analyses presented by J.P. Morgan. These analyses included, among others, discounted cash flow analysis and public trading multiples analysis. J.P. Morgan also presented to the Special Committee historical trading prices of the ADSs and the adjusted P/E method, but noting that these are not valuation methodologies but were presented merely for informational purposes. All of the material analyses as presented to the Special Committee on March 26, 2018 are summarized below under the caption "Special Factors—Opinion of the Special Committee's Financial Advisor" beginning on page 78. The Special Committee expressly adopted these analyses and opinions, among other factors considered, in reaching its determination as to the fairness of the transactions contemplated by the merger agreement, including the merger.

        Neither the Special Committee nor the Board considered the liquidation value of the Company's assets because each considers the Company to be a viable going-concern business where value is derived from cash flows generated from its continuing operations. In addition, the Special Committee and the Board believe that the value of the Company's assets that might be realized in a liquidation

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would be significantly less than its going-concern value. Each of the Special Committee and the Board believes the analyses and additional factors it reviewed provided an indication of the Company's going-concern value. Each of the Special Committee and the Board also considered the historical market prices of the Company's ADSs as described under the caption "Market Price of the Company's ADSs, Dividends and Other Matters—Market Price of the ADSs" beginning on page 107. Each of the Special Committee and the Board considered the purchase prices paid in previous purchases as described under "Transactions in the Shares and ADSs" beginning on page 144. Neither the Special Committee nor the Board, however, considered the Company's net book value, which is defined as total assets minus total liabilities, attributable to the Company's shareholders, as a factor. The Special Committee and the Board believe that net book value is not a material indicator of the value of the Company as a going concern as it does not take into account the future prospects of the Company, market conditions, trends in the industry or the business risks inherent in competing with larger companies in that industry. The Company's net book value per Share as of March 31, 2017 was US$9.57 based on 34,721,539 issued and outstanding Shares as of that date.

        In reaching its determination that the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, are fair to, and in the best interests of, the Company and its shareholders, including the unaffiliated shareholders, and its decision to authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, and recommend the authorization and approval of the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, by the Company's shareholders, the Board, on behalf of the Company, considered the analysis and recommendation of the Special Committee and the factors examined by the Special Committee as described above under this section and under the caption "Special Factors—Background of the merger," and adopted such recommendations and analysis. During its consideration of the merger agreement and the transactions contemplated by the merger agreement, including the merger, the Board was also aware that some of the Company's directors and shareholders, including the chairman of the Board, and other employees of the Company, have interests with respect to the merger that are, or may be, different from, and/or in addition to those of the Company's unaffiliated shareholders generally, as described under the caption "Special Factors—Interests of Certain Persons in the merger" beginning on page 98. At the meeting of the Board on March 26, 2018 in which the Board authorized and approved the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, each of Mr. Zhang, Mr. He and Ms. Feiyan Huang abstained from voting in light of his or her interests in the transactions contemplated by the merger agreement, including the merger, as a Rollover Shareholder or a related party of a Rollover Shareholder, as applicable.

        Except as set forth under "Special Factors—Background of the merger" beginning on page 28, "Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board" beginning on page 64 and "Special Factors—Opinions of the Special Committee's Financial Advisor" beginning on page 78, no director who is not an employee of the Company has retained an unaffiliated representative to act solely on behalf of unaffiliated shareholders for purposes of negotiating the terms of the transactions contemplated by the merger agreement and/or preparing a report concerning the fairness of the transactions contemplated by the merger agreement.

        For the foregoing reasons, the Special Committee and the Board believe that the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, are substantially and procedurally fair to, and in the best interests of, the Company and its shareholders, including the unaffiliated shareholders.

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Position of the Buyer Group as to the Fairness of the Merger

        Under SEC rules governing going-private transactions, each member of the Buyer Group is required to express his, her or its belief as to the fairness of the merger to the unaffiliated shareholders. Each member of the Buyer Group is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The views of the Buyer Group as to the fairness of the merger are not intended to be, and should not be construed as, a recommendation to any shareholder of the Company as to how that shareholder or holder of ADSs should vote on the proposal to authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger. The Buyer Group has interests in the merger that are different from, and/or in addition to, those of the other shareholders of the Company by virtue of their continuing interests in the surviving company after the completion of the merger. These interests are described under the section entitled "—Interests of Certain Persons in the Merger—Interests of the Buyer Group" beginning on page 98.

        The Buyer Group believes the interests of the unaffiliated shareholders were represented by the Special Committee, which negotiated the terms and conditions of the merger agreement with the assistance of its independent legal and financial advisors. The Buyer Group attempted to negotiate a transaction that would be most favorable to it, and not to the unaffiliated shareholders, and, accordingly, did not negotiate the merger agreement with a goal of obtaining terms that were fair to such holders. The Buyer Group did not participate in the deliberations of the Special Committee regarding, and did not receive any advice from the Special Committee's independent legal or financial advisors as to, the fairness of the merger to the unaffiliated shareholders. Furthermore, the members of the Buyer Group did not themselves undertake a formal evaluation of the fairness of the merger. No financial advisor provided the Buyer Group with any analysis or opinion with respect to the fairness of the merger consideration to the unaffiliated shareholders.

        Based on their knowledge and analysis of available information regarding the Company, as well as discussions with the Company's senior management regarding the Company and its business and the factors considered by, and findings of, the Special Committee and the Board discussed under the section entitled "—Reasons for the Merger and Recommendation of the Special Committee and the Board" beginning on page 64, the Buyer Group believes that the merger is substantively fair to the unaffiliated shareholders based on the following factors, which are not listed in any relative order of importance:

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        The Buyer Group's consideration of the factors described above reflects its assessment of the fairness of the consideration of US$41.20 per Share or US$20.60 per ADS, without interest and net of any withholding taxes, payable in the merger to the unaffiliated shareholders in relation to the going-concern value of the Company on a stand-alone basis. The Buyer Group did not consider the Company's liquidation value to be a relevant valuation method because it considers the Company to be a viable going concern and because the Company will continue to operate its business following the merger. The Buyer Group views the trading history of the ADSs as an indication of the Company's going concern value, and, accordingly, did not believe liquidation value to be relevant to a determination as to the fairness of the merger.

        The Buyer Group did not consider the Company's net book value, which is defined as total assets minus total liabilities, attributable to the Company's shareholders, as a factor. The Buyer Group believes that net book value, as an accounting concept based on historical costs, is not a material indicator of the value of the Company as a going concern because it does not take into account quality of earnings, cash generation capability, the future prospects of the Company, market conditions, trends in the industry in which the Company conducts its business or the business risks inherent in competing with other companies in the same industry but rather is indicative of historical costs. Therefore, the Buyer Group does not believe that net book value is a relevant measure in the determination as to the fairness of the merger. The Buyer Group notes, however, that the merger consideration of US$41.20 per Share and US$20.60 per ADS, without interest and net of any withholding taxes, are substantially higher than the Company's net book value per Share of approximately US$9.76 as of March 31, 2017 (based on the weighted average number of issued and outstanding Shares during 2017).

        The Buyer Group did not establish, and did not consider, a going concern value for the Company as a public company to determine the fairness of the merger consideration to the unaffiliated shareholders because, following the merger, the Company will have a significantly different capital structure. However, to the extent the pre-merger going concern value was reflected in the pre-announcement price of the Company's ADSs, the merger consideration of US$20.60 per ADS, without interest and net of any withholding taxes, represents a premium to the going concern value of the Company.

        The Buyer Group did not perform or receive any independent reports, opinions or appraisals from any third party related to the merger, and thus did not consider any such reports, opinions or appraisals in determining the substantive and procedural fairness of the merger to the unaffiliated shareholders.

        The Buyer Group believes that the merger is also procedurally fair to the unaffiliated shareholders based on the following factors, which are not listed in any relative order of importance:

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        The foregoing is a summary of the information and factors considered and given weight by the Buyer Group in connection with its evaluation of the fairness of the merger to the unaffiliated shareholders, which is not intended to be exhaustive, but is believed by the Buyer Group to include all material factors considered by it. The Buyer Group did not find it practicable to assign, and did not assign, relative weights to the individual factors considered in reaching their conclusion as to the fairness of the merger to the unaffiliated shareholders. Rather, its fairness determination was made after consideration of all of the foregoing factors as a whole.

        The Buyer Group believes these factors provide a reasonable basis for its belief that the merger is both substantively and procedurally fair to the unaffiliated security holders. This belief, however, is not intended to be and should not be construed as a recommendation by the Buyer Group to any shareholder of the Company as to how such shareholder should vote with respect to the approval of the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger.

Certain Financial Projections

        The Company's management does not, as a matter of course, make available to the public future financial projections. However, the Company's management provided the prospective financial information set forth below for the fiscal year ended March 31, 2018 through the fiscal year ending March 31, 2026 (the "Company Projections") to the Special Committee and J.P. Morgan, as the financial advisor to the Special Committee, who was authorized by the Special Committee to use and rely upon the Company Projections, including for purposes of its financial analyses of the per share merger consideration to be paid to the holders of the Shares (other than holders of Excluded Shares or Dissenting Shares) in the transactions contemplated by the merger agreement. The Company Projections, which had been prepared based on management's projection of the Company's future financial performance and management's collective best estimates and judgments as of the date provided, were prepared by the Company's management for internal use and were not prepared with a view toward public disclosure or compliance with published guidelines of the SEC regarding forward-looking information or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts or U.S. generally accepted accounting principles ("U.S. GAAP").

        The projections included in the Company Projections are not a guarantee of performance. They involve significant risks, uncertainties and assumptions. In compiling the projections, management took into account historical performance, combined with estimates regarding net revenue, operating expenses, income from operations, profit before tax, EBITDA, net income attributable to ordinary shareholders, and capital expenditures and acquisitions. Although the Company Projections are presented with numerical specificity, they were based on numerous assumptions and estimates as to future events made by management that management believed were reasonable at the time the projections were prepared. However, this information is not fact and should not be relied upon as being necessarily indicative of actual future results. In addition, factors such as industry performance,

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the market for the Company's services, the competitive environment, expectations regarding future acquisitions and construction of new medical centers, and general business, economic, regulatory, market and financial conditions, all of which are difficult to predict and beyond the control of management, may cause actual future results to differ materially from the results forecasted in these financial projections. The main assumptions underlying the Company Projections are (in no particular order):

        The Company Projections do not take into account any circumstances or events occurring after the date that they were prepared. For instance, the projections do not give effect to completion of the merger or any changes to the Company's operations or strategy that may be implemented after the time the projections were prepared. As a result, there can be no assurance that the projections will be realized, and actual results may be significantly different from those contained in the Company Projections.

        Neither the Company's independent registered public accounting firm, Deloitte Touche Tohmatsu Certified Public Accountants LLP, nor any other independent accountants have examined, compiled or performed any procedures with respect to the Company Projections or any amounts derived therefrom or built thereupon and, accordingly, they have not expressed any opinion or given any form of assurance on the Company Projections or their achievability. The financial projections included in this proxy statement are included solely to give shareholders access to certain information that was made available to the Special Committee and to the Special Committee's financial advisor and are not included for the purpose of influencing any shareholder to make any investment decision with respect to the merger, including whether or not to vote in favor of approval of the merger agreement or whether or not to exercise dissenters' rights pursuant to Section 238 of the Cayman Islands Companies Law in respect of his, her or its Shares.

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        The following table summarizes the Company Projections, which were also provided to the Buyer Group and its financial advisor:

 
  Company Projections as of March 21, 2018  
 
  Fiscal Year ending March 31,  
RMB in millions(1)
  2018(2)   2019   2020   2021   2022   2023   2024   2025   2026   2027  

Net revenues

    3,693     4,581     5,705     7,126     8,699     10,004     11,005     11,885     12,598     13,228  

Growth %

    26.1 %   24.0 %   24.6 %   24.9 %   22.1 %   15.0 %   10.0 %   8.0 %.   6.0 %   5.0 %

Gross profit

    1,557     2,029     2,528     3,104     3,731     4,285     4,722     5,124     5,465     5,773  

Margin %

    42.2 %   44.3 %   44.3 %   43.6 %   42.9 %   42.8 %   42.9 %   43.1 %   43.4 %   43.6 %

Operating expenses:

                                                             

Selling and marketing expenses

    (634 )   (786 )   (978 )   (1,218 )   (1,485 )   (1,701 )   (1,863 )   (2,002 )   (2,111 )   (2,210 )

As a % of net revenues

    17.2 %   17.1 %   17.1 %   17.1 %   17.1 %   17.0 %   16.9 %   16.8 %   16.8 %   16.7 %

General and administrative expenses

    (770 )   (673 )   (821 )   (962 )   (1,147 )   (1,323 )   (1,455 )   (1,571 )   (1,666 )   (1,749 )

As a % of net revenues

    20.8 %   14.7 %   14.4 %   13.5 %   13.2 %   13.2 %   13.2 %   13.2 %   13.2 %   13.2 %

Research and development expenses

    (21 )   (35 )   (44 )   (55 )   (67 )   (77 )   (84 )   (91 )   (97 )   (102 )

As a % of net revenues

    0.6 %   0.8 %   0.8 %   0.8 %   0.8 %   0.8 %   0.8 %   0.8 %   0.8 %   0.8 %

Non-U.S. GAAP EBIT(3)

    378     535     685     869     1,033     1,184     1,320     1,459     1,592     1,712  

Margin %

    10.2 %   11.7 %   12.0 %   12.2 %   11.9 %   11.8 %   12.0 %   12.3 %   12.6 %   12.9 %

Non-U.S. GAAP EBITDA(3)

    634     817     1,048     1,338     1,609     1,850     2,035     2,198     2,330     2,447  

Margin %

    17.2 %   17.8 %   18.4 %   18.8 %   18.5 %   18.5 %   18.5 %   18.5 %   18.5 %   18.5 %

Growth %

    76.9 %   28.9 %   28.2 %   27.6 %   20.3 %   15.0 %   10.0 %   8.0 %   6.0 %   5.0 %

Capex and acquisition

    (285 )   (335 )   (747 )   (860 )   (871 )   (956 )   (953 )   (863 )   (801 )   (788 )

As a % of net revenues

    7.7 %   7.3 %   13.1 %   12.1 %   10.0 %   9.6 %   8.7 %   7.3 %   6.4 %   6.0 %

Notes:

(1)
RMB in millions rounded to the nearest whole number.

(2)
Estimated financial measures for fiscal year ended March 31, 2018 are based on management's knowledge of the Company's unaudited financial results for the first three quarters of such fiscal year.

(3)
Non-U.S. GAAP financial measure is adjusted from results based on U.S. GAAP to exclude share-based compensation expenses.

        The Special Committee's financial advisor reviewed certain financial analyses that were based, in part, on the financial projections above; for additional information regarding such analyses, see "Discussion Materials prepared by J.P. Morgan Securities (Asia Pacific) Limited for discussion with the Special Committee of the board of directors of the Company, March 26, 2018" filed as Exhibit (c)-(2) to the Company's transaction statement on Schedule 13E-3 and "Special Factors—Opinion of the Special Committee's Financial Advisor" beginning on page 78.

        The financial projections and forecasts included in this proxy statement should not be considered in isolation or in lieu of the Company's operating and other financial information determined in accordance with U.S. GAAP. See "Financial Information—Selected Historical Financial Information" beginning on page 142.

        The financial projections and forecasts included in this proxy statement are forward-looking statements. For information on factors that may cause the Company's future financial results to materially vary, see "Cautionary Note Regarding Forward-Looking Statements" beginning on page 151 and "Item 3. Key Information—D. Risk Factors" included in the Company's Annual Report on Form 20-F for the fiscal year ended March 31, 2017, incorporated by reference into this proxy statement.

        For the foregoing reasons, as well as the bases and assumptions on which the financial projections and forecasts were compiled, the inclusion of specific portions of the financial projections and forecasts in this proxy statement should not be regarded as an indication that the Company, the Special

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Committee (or its financial advisor) or the Board considers such financial projections or forecasts to be an accurate prediction of future events, and the projections and forecasts should not be relied on as such an indication. No one has made or is making any representation to any shareholders of the Company or anyone else regarding the information included in the financial projections and forecasts discussed above.

        NONE OF THE COMPANY OR ITS AFFILIATES, ADVISORS, OFFICERS, DIRECTORS OR REPRESENTATIVES HAS MADE OR MAKES ANY REPRESENTATION TO ANY SHAREHOLDER OR OTHER PERSON REGARDING THE ULTIMATE PERFORMANCE OF THE COMPANY COMPARED TO THE INFORMATION CONTAINED IN THE COMPANY PROJECTIONS OR THAT PROJECTED RESULTS WILL BE ACHIEVED.

        BY INCLUDING IN THIS PROXY STATEMENT A SUMMARY OF ITS FINANCIAL PROJECTIONS AND FORECASTS INCLUDED IN THE COMPANY PROJECTIONS, THE COMPANY UNDERTAKES NO OBLIGATIONS TO UPDATE, OR PUBLICLY DISCLOSE ANY UPDATE TO, THESE FINANCIAL PROJECTIONS TO REFLECT CIRCUMSTANCES OR EVENTS, INCLUDING UNANTICIPATED EVENTS, THAT MAY HAVE OCCURRED OR THAT MAY OCCUR AFTER THE PREPARATION OF THESE PROJECTIONS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE FINANCIAL PROJECTIONS ARE SHOWN TO BE IN ERROR OR CHANGE, EXCEPT TO THE EXTENT REQUIRED BY APPLICABLE FEDERAL SECURITIES LAW.

Opinion of the Special Committee's Financial Advisor

        Pursuant to an engagement letter dated November 10, 2015, as amended, the Special Committee retained J.P. Morgan to act as its financial advisor and deliver a fairness opinion in connection with the merger.

        At the meeting of the Special Committee on March 26, 2018, J.P. Morgan rendered its oral opinion to the Special Committee that, as of such date and based upon and subject to the factors, assumptions, and limitations set forth in its opinion, the per share merger consideration to be paid to the holders of Shares (other than holders of Excluded Shares or Dissenting Shares) in the merger, was fair, from a financial point of view, to such holders. J.P. Morgan has confirmed its oral opinion rendered on March 26, 2018 by delivering its written opinion to the Special Committee, dated as of the same date, that, as of such date, the per share merger consideration to be paid to the holders of the Shares (other than holders of Excluded Shares or Dissenting Shares) in the merger was fair, from a financial point of view, to such holders. No limitations were imposed by the Special Committee upon J.P. Morgan with respect to the investigations made or procedures followed by it in rendering its opinions.

        The full text of the written opinion of J.P. Morgan dated March 26, 2018, which sets forth the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken, is attached as Annex C to this proxy statement and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this proxy statement is qualified in its entirety by reference to the full text of such opinion. The shareholders of the Company are urged to read the opinion in its entirety. J.P. Morgan's written opinion is addressed to the Special Committee (in its capacity as such) in connection with and for the purposes of its evaluation of the merger, is directed only to the consideration to be paid to the holders of the Shares, including the Shares represented by ADSs but excluding the Excluded Shares or Dissenting Shares, and does not constitute a recommendation to any shareholder of the Company, or holder of ADSs, as to how such shareholder or holder of ADSs should vote with respect to the merger or any other matter. The issuance of J.P. Morgan's opinion was approved by a fairness committee of J.P. Morgan.

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        In connection with preparing its opinion, J.P. Morgan:

        J.P. Morgan also held discussions with certain members of the management of the Company with respect to certain aspects of the merger, and the past and current business operations of the Company, the financial condition and future prospects and operations of the Company, and certain other matters J.P. Morgan believed necessary or appropriate to its inquiry.

        In giving its opinion, J.P. Morgan relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with J.P. Morgan by the Company or otherwise reviewed by or for J.P. Morgan. J.P. Morgan did not independently verify any such information or its accuracy or completeness and, pursuant to J.P. Morgan's engagement letter with the Special Committee, J.P. Morgan did not assume any obligation to undertake any such independent verification. J.P. Morgan did not conduct and was not provided with any valuation or appraisal of any assets or liabilities, nor did J.P. Morgan evaluate the solvency of the Company, Parent, Merger Sub, or any of their respective affiliates under any applicable laws relating to bankruptcy, insolvency, or similar matters. In relying on financial analyses and forecasts provided to J.P. Morgan or derived therefrom, J.P. Morgan has assumed that they have been reasonably prepared based on assumptions reflecting the best then available estimates and judgments by management of the Company as to the expected future results of operations and financial condition of the Company to which such analyses or forecasts relate. J.P. Morgan expressed no view as to such analyses or forecasts or the assumptions on which they were based. J.P. Morgan also assumed that the merger and the other transactions contemplated by the merger agreement will be consummated as described in the merger agreement. J.P. Morgan also assumed that the representations and warranties made by the Company, Parent, Merger Sub, or any of their respective affiliates in the merger agreement and the related agreements are and will be true and correct in all respects material to its analysis. J.P. Morgan did not act as a legal, regulatory, or tax expert and has relied on the assessments made by advisors to the Company with respect to such issues. J.P. Morgan did not express any view or render any opinion regarding the tax consequences of the merger to the Company or to the holders of the Shares. J.P. Morgan further assumed that that all material governmental, regulatory or other consents and approvals necessary for the consummation of the merger will be obtained without any adverse effect on the Company or on the contemplated benefits of the merger.

        The financial projections furnished to J.P. Morgan for the Company and used in connection with J.P. Morgan's analysis of the merger were prepared by the management of the Company and approved for use by J.P. Morgan by the Special Committee. The Company informed J.P. Morgan that it does not

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publicly disclose internal management projections of the type provided to J.P. Morgan in connection with J.P. Morgan's analysis of the merger, and such projections were not prepared with a view toward public disclosure. These projections were based on numerous variables and assumptions that are inherently uncertain and may be beyond the control of management, including, without limitation, factors related to general economic and competitive conditions and prevailing interest rates. Accordingly, actual results could vary significantly from those set forth in such projections.

        J.P. Morgan's opinion is necessarily based on economic, market, and other conditions as in effect on, and the information made available to J.P. Morgan as of, March 26, 2018 (being the date of such opinion). It should be understood that subsequent developments may affect J.P. Morgan's opinion, and J.P. Morgan does not have any obligation to update, revise, or reaffirm such opinion. J.P. Morgan's opinion is limited to the fairness, from a financial point of view, of the per share merger consideration to be paid to the holders of the Shares (other than holders of Excluded Shares or Dissenting Shares) in the merger, and J.P. Morgan expressed no opinion as to the fairness of any consideration to be paid in connection with the merger to the holders of any other class of securities, creditors, or other constituencies of the Company or as to the underlying decision by the Company to engage in the merger. Furthermore, J.P. Morgan expressed no opinion with respect to the amount or nature of any compensation to any officers, directors, or employees of any party to the merger, or any class of such persons relative to the per share merger consideration to be paid to the holders of the Shares (other than holders of Excluded Shares or Dissenting Shares) in the merger or with respect to the fairness of any such compensation. J.P. Morgan expressed no opinion as to the price at which the ADSs will trade at any future time.

        The terms of the merger agreement were determined through arm's length negotiations between the Special Committee and the Sponsors. J.P. Morgan's opinion and financial analyses were only one of the many factors considered by the Special Committee in its evaluation of the merger and should not be viewed as determinative of the views of the Special Committee with respect to the merger or the consideration.

        In accordance with customary investment banking practice, J.P. Morgan employed generally accepted valuation methodologies in rendering its opinion to the Special Committee on March 26, 2018 and in its presentation that was delivered to the Special Committee on such date in connection with the rendering of such opinion, and the following does not purport to be a complete description of the analyses or data presented by J.P. Morgan. The following is a summary of the material financial analyses utilized by J.P. Morgan in connection with providing its opinion. J.P. Morgan has consented to the inclusion and disclosure of such summary of its material financial analyses in this proxy statement. Some of the summaries of the financial analyses include information presented in tabular format. The tables are not intended to stand alone. In order to fully understand the financial analyses used by J.P. Morgan, the tables must be read together with the full text of each summary. Considering the data in the tables without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of J.P. Morgan's financial analyses.

        All values in the sections "Discounted Cash Flow Analysis" and "Public Trading Multiples Analysis" below are presented on an equity value per ADS basis. In arriving at equity value per ADS for the Company, the "Discounted Cash Flow Analysis" started with the determination of firm value, or "FV," for the Company. FV was then adjusted by subtracting total debt outstanding as of December 31, 2017, adding total cash and cash equivalents, restricted cash, and term deposits outstanding as of December 31, 2017, subtracting total non-controlling interests as of December 31, 2017, and adding total unconsolidated investments as of December 31, 2017 to arrive at an equity value for the Company. Equity value was then divided by the number of diluted ADSs outstanding to arrive at equity value per ADS. In arriving at the equity value per ADS for the Company in the "Public Trading Multiples Analysis," J.P. Morgan reviewed certain selected companies' trading multiples based

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on (1) the ratio of FV to estimated non-GAAP earnings before interest, taxes, depreciation, and amortization ("EBITDA") for fiscal years 2017 and 2018 based on management estimates (non-GAAP EBITDA were adjusted to exclude share-based compensation) and (2) the ratio of equity value to estimated non-GAAP earnings for fiscal years 2017 and 2018 based on management estimates (non-GAAP earnings was adjusted to exclude share-based compensation), referred to as the P/E multiple. J.P. Morgan applied a multiple reference range of (1) 9.8x to 15.0x for FV to the Company's estimated non-GAAP EBITDA for fiscal year 2017 based on management estimates, (2) 5.3x to 11.9x for FV to the company's estimated non-GAAP EBITDA for fiscal year 2018 based on management estimates, (3) 23.2x to 41.4x for equity value to the Company's estimated non-GAAP earnings for fiscal year 2017 based on management estimates, and (4) 20.2x to 34.4x for equity value to the Company's estimated non-GAAP earnings for fiscal year 2018 based on management estimates. All market data used by J.P. Morgan in its analyses was as of March 23, 2018. Accordingly, this information may not reflect current or future market conditions. In addition, as each ADS represents 0.5 underlying Class A Share, all calculations of equity value per ADS or implied equity value per ADS below represent the value attributable to 0.5 Class A Share.

Discounted Cash Flow Analysis

        J.P. Morgan conducted a discounted cash flow analysis for the purpose of determining the diluted equity value per ADS. A discounted cash flow analysis is a method of evaluating an asset using estimates of the future unlevered free cash flows generated by the asset and taking into consideration the time value of money with respect to those future cash flows by calculating their "present value." "Present value" refers to the current value of one or more future cash payments from the asset, which is referred to as that asset's cash flows, and is obtained by discounting those cash flows back to the present using a discount rate that takes into account macro-economic assumptions and estimates of risk, the opportunity cost of capital, capitalized returns, and other appropriate factors. "Terminal value" refers to the capitalized value of all cash flows from an asset for periods beyond the final forecast period. J.P. Morgan calculated the unlevered free cash flows that the Company is expected to generate during fiscal years 2017 to 2026 based upon financial projections prepared by the management of the Company. See "Special Factors—Certain Financial Projections" beginning on page 75 for additional information.

        J.P. Morgan also calculated a range of terminal asset values of the Company at the end of the projection period ending 2026 by applying a perpetual growth rate ranging from 2.5% to 3.5%. The perpetual growth rate range was selected based on a combination of macro-economic factors, such as general industry trends and expected inflation rates, and the professional judgment of J.P. Morgan. The unlevered free cash flows and the range of terminal asset values were then discounted to present values using a range of discount rates from 10.0% to 12.0%, which were chosen by J.P. Morgan based upon an analysis of the weighted average cost of capital of the Company. The present value of the unlevered free cash flows and the range of terminal asset values were then adjusted by subtracting total debt outstanding as of December 31, 2017, adding total cash and cash equivalents, restricted cash, and term deposits outstanding as of December 31, 2017, subtracting total non-controlling interests as of December 31, 2017, and adding total unconsolidated investments as of December 31, 2017 to arrive at equity value for the Company. Based on these assumptions, the discounted cash flow analysis indicated a range of equity values per ADS of between US$16.63 and US$24.28.

Public Trading Multiples Analysis

        Using publicly available information, J.P. Morgan compared selected financial data of the Company with similar data for selected publicly traded companies engaged in businesses which J.P. Morgan judged to be similar to the Company. The companies selected by J.P. Morgan were:

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        These companies were selected, among other reasons, because they represent the main publicly traded peers in China's healthcare industry with operations and businesses that, for purposes of J.P. Morgan's analysis, may be considered similar to that of the Company. However, none of the selected companies reviewed are identical to the Company. Accordingly, a complete analysis of the results of the following calculations cannot be limited to a quantitative review of such results and involves complex considerations and judgments concerning the differences in the financial and operating characteristics of the selected companies compared to the Company's and other factors that could affect the public trading value of the selected companies and the Company.

        In all instances, multiples were based on closing share prices of the selected publicly traded companies on March 23, 2018. For each of the following analyses performed by J.P. Morgan, estimated financial data for the selected companies were based on the selected companies' filings with the SEC and any other relevant stock exchanges as well as the publicly available consensus estimates of Wall Street analysts, and estimated financial data for the Company was based on the financial projections prepared by the management of the Company. See "Special Factors—Certain Financial Projections" beginning on page 75 for additional information.

        In conducting its analyses, J.P. Morgan reviewed the selected companies' trading multiples based on (1) the ratio of FV to estimated non-GAAP EBITDA for fiscal years 2017 and 2018 based on management estimates (non-GAAP EBITDA was adjusted to exclude share-based compensation) and (2) the ratio of equity value to estimated non-GAAP earnings for fiscal years 2017 and 2018 based on management estimates (non-GAAP earnings was adjusted to exclude share-based compensation), referred to as the P/E multiple. Results of the analyses were presented for the selected companies, as indicated in the following table:

 
  FV/EBITDA   P/E  
 
  FY2017E   FY2018E   FY2017E   FY2018E  

China Resources Phoenix Healthcare Holdings Company Limited

    14.1x     11.1x     23.2x     21.4x  

New Century Healthcare Holding Co. Limited

    15.0x     11.9x     37.7x     27.3x  

Rici Healthcare Holdings Limited

    15.0x     5.3x     NM (1)   34.4x  

Harmonicare Medical Holdings Limited

    9.8x     6.3x     41.4x     20.2x  

(1)
FY2017E net income of Rici Healthcare is negative based on Bloomberg consensus.

        Based on the above analyses, J.P. Morgan applied a multiple reference range of (1) 9.8x to 15.0x for FV to the Company's estimated non-GAAP EBITDA for fiscal year 2017 based on management estimates, (2) 5.3x to 11.9x for FV to the Company's estimated non-GAAP EBITDA for fiscal year 2018 based on management estimates, (3) 23.2x to 41.4x for equity value to the Company's estimated non-GAAP earnings for fiscal year 2017 based on management estimates, and (4) 20.2x to 34.4x for equity value to the Company's estimated non-GAAP earnings for fiscal year 2018 based on management estimates. In comparison to the per share merger consideration, the analyses indicated the following equity values per ADS:

FV/EBITDA   P/E
FY2017E   FY2018E   FY2017E   FY2018E
US$13.93 to US$20.76   US$10.37 to US$21.98   US$7.45 to US$13.04   US$11.80 to US$19.86

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Other Analysis for Information Purpose Only

        J.P. Morgan noted that historical stock trading is not a valuation methodology but was presented merely for informational purposes.

        The closing price of the Company on March 9, 2018 was US$17.92 per ADS. The trading range of closing prices for the Company for the 52-week period ended March 9, 2018 was between US$11.73 per ADS and US$17.92 per ADS. March 9, 2018 was the last trading date immediately prior to March 12, 2018, on which date the going-private proposal was announced. The volume weighted average price for the 30 and 60 trading days prior to the announcement of receipt of the going-private proposal was US$16.52 per ADS and US$16.04 per ADS, respectively.

        In addition, merely for informational purposes, based on the above public trading multiples analyses, J.P. Morgan applied a multiple reference range of (1) 23.2x to 41.4x for equity value to the Company's estimated non-GAAP earnings for fiscal year 2017 based on management estimates, and (2) 20.2x to 34.4x for equity value to the Company's estimated non-GAAP earnings for fiscal year 2018 based on management estimates, in each case, adjusting such non-GAAP earnings to exclude gain and loss from equity method investments and increasing such equity values to account for investments in unconsolidated companies at book value. In comparison to the per share merger consideration, the analyses indicated the following equity values per ADS:

Adjusted P/E Method
FY2017E   FY2018E
US$12.38 to US$19.80   US$15.50 to US$24.35

        When conducting a fairness analysis, it is J.P. Morgan's standard practice to review various potential valuation methodologies and select those valuation methodologies that are most suitable for the transaction in question. J.P. Morgan believes that such review not only could enhance the quality of the valuation analysis but is also necessary and advisable given the wide range of valuation methodologies that are available. Such review and analyses and any determination to select certain but not other valuation methodologies necessarily involve complex considerations and judgments concerning differences in the theoretical basis and characteristics of the valuation methodologies, financial and operational characteristics of the companies involved, the history and background of the transaction in question, the identity of the parties involved and other factors that could affect the accuracy or suitability of the valuation methodologies. Similarly, historical stock prices of the subject company may also be subject to distortion by factors including (without limitation) historical events that may no longer be relevant to the company's current value, as well as various other factors that could affect the stock prices of publicly traded companies.

        However, J.P. Morgan presented certain data relevant to certain valuation methodologies for informational purposes only even though such methodologies were not selected as valuation methodologies in its fairness analysis, because, among other reasons, (i) such presentation demonstrates the scope of J.P. Morgan's analysis and that it considered these valuation methodologies, which could be useful to the Special Committee's evaluation of J.P. Morgan's advice and (ii) J.P. Morgan recognizes that the Special Committee's determination on whether or not to pursue any particular strategic alternative of the Company necessarily takes into account various factors beyond just the fairness, from a financial point of view, of the consideration payable in any transaction being evaluated, and therefore, although the data presented were not directly used as the basis of J.P. Morgan's fairness analysis, such data could nonetheless be useful to the Special Committee's decision-making process. The foregoing summary of certain material financial analyses does not purport to be a complete description of the analyses or data presented by J.P. Morgan. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. J.P. Morgan believes that the foregoing summary and its analyses must be considered as a whole and that selecting portions of

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the foregoing summary and these analyses, without considering all of its analyses as a whole, could create an incomplete view of the processes underlying the analyses and its opinion. As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described above were merely utilized to create points of reference for analytical purposes and should not be taken to be the view of J.P. Morgan with respect to the actual value of the Company. The order of analyses described does not represent the relative importance or weight given to those analyses by J.P. Morgan. In arriving at its opinion, J.P. Morgan did not attribute any particular weight to any analyses or factors considered by it and did not form an opinion as to whether any individual analysis or factor (positive or negative), considered in isolation, supported or failed to support its opinion. Rather, J.P. Morgan considered the totality of the factors and analyses performed in determining its opinion.

        Analyses based upon forecasts of future results are inherently uncertain, as they are subject to numerous factors or events beyond the control of the parties and their advisors. Accordingly, forecasts and analyses used or made by J.P. Morgan are not necessarily indicative of actual future results or, should the merger fail to be consummated, the future value of the ADSs, which may be significantly more or less favorable than suggested by those analyses. Moreover, J.P. Morgan's analyses are not and do not purport to be appraisals or otherwise reflective of the prices at which businesses actually could be bought or sold. None of the selected companies reviewed as described in the above summary are identical to the Company. However, the companies selected were chosen because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan's analysis, may be considered similar to those of the Company. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies compared to the Company.

        As a part of its investment banking business, J.P. Morgan and its affiliates are continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements, and valuations for estate, corporate, and other purposes. J.P. Morgan was selected to advise the Special Committee and deliver an opinion to the Special Committee with respect to the merger on the basis of such experience and its familiarity with the Company.

        Under the terms of J.P. Morgan's engagement and for its service, the Company has agreed to pay J.P. Morgan (1) a fee of US$2.0 million payable upon delivery of the opinion, (2) a fee of US$2.0 million payable upon public announcement of the merger, and (3) an additional fee of US$3.0 million payable upon the consummation of the merger. In addition, the Company has agreed to reimburse J.P. Morgan for its reasonable expenses incurred in connection with its services, including the reasonable fees and expenses of outside legal counsel engaged by J.P. Morgan in connection with its performance of services hereunder. The Company has also agreed to indemnify J.P. Morgan for certain liabilities arising out of J.P. Morgan's engagement.

        In addition, during the two years preceding March 26, 2018 (being the date of its opinion), J.P. Morgan and its affiliates have had commercial and/or investment banking relationships with the Company, one of the Sponsors, and Alibaba Group Holding Limited (an affiliate of the Sponsors, "AG Holding") and certain of its affiliates, for which J.P. Morgan and such affiliates have received customary compensation. Such services during such period have included providing or arranging debt and equity financing, providing M&A advisory services, acting as placement agent on a pre-initial public offering private placement, and acting as bookrunner on an initial public offering. In addition, J.P. Morgan's commercial banking affiliate is a lender under outstanding credit facilities of AG Holding and certain of its affiliates, for which it receives customary compensation or other financial benefits. In addition, J.P. Morgan and its affiliates hold, on a proprietary basis, less than 1% of the outstanding equity securities of the Company and AG Holding. In the ordinary course of their businesses, J.P. Morgan and its affiliates may actively trade the debt and equity securities or financial instruments (including derivatives, bank loans, or other obligations) of the Company and AG Holding for their own accounts

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or for the accounts of customers, and accordingly, J.P. Morgan and its affiliates may at any time hold long or short positions in such securities or other financial instruments.

        Except for the fairness opinion delivered to the Special Committee by J.P. Morgan in connection with the merger, none of the Special Committee, the Company, or the Company's affiliates (including any affiliate of the Company who participated in Buyer Group 1 or continue to participate in the Buyer Group) received any other report, opinion, or appraisal from any outside third party materially related to the merger.

        The Company is organized under the laws of the Cayman Islands, and the relationship of the Special Committee and the Company and its shareholders is governed by Cayman Islands law. J.P. Morgan's engagement letter with the Special Committee does not create any contractual relationship with the Company's shareholders. J.P. Morgan's opinion and its presentation to the Special Committee, dated March 26, 2018, were furnished solely for the use and benefit of the Special Committee in connection with its consideration of the merger and are not intended to, and do not, confer any rights or remedies upon any shareholder of the Company or any other person. J.P. Morgan intends to assert the substance of the disclaimers included in this proxy statement, its opinion and its presentation to the Special Committee, dated March 26, 2018, as a defense to any shareholder claim that might be brought against it under Cayman Islands law. Any defenses by J.P. Morgan with respect to a claim by a shareholder of the Company would be subject to resolution under applicable law and would need to be resolved by a court of competent jurisdiction. The availability or non-availability of such a defense will have no effect on the rights and responsibilities of the board of directors under Cayman Islands law, or the rights and responsibilities of the board of directors or J.P. Morgan under the U.S. federal securities laws.

        J.P. Morgan has expressly consented to the inclusion of its opinion and presentation to the Special Committee, dated March 26, 2018, as exhibits to the transaction statement on Schedule 13E-3 filed with the SEC in connection with the merger. These materials will also be available for any interested shareholder of the Company (or any representative of a shareholder who has been so designated in writing) to inspect and copy as set forth herein. However, neither the opinion of J.P. Morgan nor its presentation to the Special Committee constitutes a recommendation to any shareholder of the Company as to how such shareholder should vote with respect to the Transaction or any other matter.

Purposes of and Reasons for the Merger

The Buyer Group

        Under the SEC rules governing "going private" transactions, each member of the Buyer Group may be deemed to be engaged in a "going private" transaction and, therefore, required to express its reasons for the merger to the Company's unaffiliated security holders, as defined in Rule 13e-3 of the Exchange Act. Each member of the Buyer Group is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. For the Buyer Group, the purpose of the merger is to enable Parent to acquire 100% control of the Company, in a transaction in which holders of the Shares and the ADSs (other than the Excluded Shares, the Dissenting Shares and ADSs representing the Excluded Shares) will be cashed out in exchange for US$41.20 per Share or US$20.60 per ADS, respectively, without interest and net of any applicable withholding taxes, so that Parent will bear the rewards and risks of the sole ownership of the Company after the ADSs and Shares are cancelled in the merger, including any increases in value of the Company as a result of improvements to the Company's operations or acquisitions of other businesses.

        The Buyer Group believes the operating environment has changed in a significant manner since the Company's initial public offering. There is greater domestic competition in many of the segments in which the Company operates. These changes have increased the uncertainty and volatility inherent in

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the business models of companies similar to the Company. As a result, the Buyer Group is of the view that there is potential for considerably greater short- and medium-term volatility in the Company's earnings. Responding to current market challenges will require tolerance for volatility in the performance of the Company's business and a willingness to make business decisions focused on improving the Company's long-term profitability. The Buyer Group believes that these strategies would be most effectively implemented in the context of a private company structure. As a privately held entity, the Company's management will have greater flexibility to focus on improving long-term profitability without the pressures exerted by the public market's valuation of the Company and its emphasis on short-term period-to-period performance.

        Further, as a privately held company, the Company will be relieved of many of the expenses, burdens and constraints imposed on companies that are subject to the public reporting requirements under the U.S. federal securities laws, including the Exchange Act and the Sarbanes-Oxley Act of 2002.

        The Buyer Group decided to undertake the "going private" transaction at this time because it wants to take advantage of the benefits of the Company being a privately held company as described above and because Merger Sub was able to obtain equity financing from the Sponsors in connection with the merger. In the course of considering the "going private" transaction, the Buyer Group did not consider alternative transaction structures except as disclosed in the January 9, 2018 entry in the Background of Merger section on page 51, and the Buyer Group believed the merger was the most direct and effective way to enable the Buyer Group to acquire ownership and control of the Company.

The Company

        The Company's purpose for engaging in the merger is to enable its shareholders to receive US$41.20 per Share, or US$20.60 per ADS, in cash, without interest and net of any applicable withholding taxes, which represents a premium of 15.0% over the closing price of US$17.92 per ADS on March 9, 2018, and a premium of 24.7% and 28.5%, respectively, to the volume-weighted average price of the Company's ADSs during the 30 and 60 trading days through March 9, 2018, the last trading day prior to the date that the Company announced that it had received the Yunfeng and Alibaba Proposal. The Company believes its long-term objectives can best be pursued as a private company. The Company has determined to undertake the merger at this time based on the analyses, determinations and conclusions of the Special Committee and the Board described in detail under the caption "—Reasons for the Merger and Recommendation of the Special Committee and the Board."

Effect of the Merger on the Company

Private Ownership

        Our ADSs representing Shares are currently listed on NASDAQ under the symbol "KANG." It is expected that, following the consummation of the merger, the Company will cease to be a publicly traded company and will instead become a private company beneficially owned by the Sponsors and the Rollover Shareholders. Following the completion of the merger, the ADSs will cease to be listed on any securities exchange or quotation system, including NASDAQ, and price quotations with respect to sales of the ADSs in the public market will no longer be available. In addition, registration of the ADSs and the underlying Shares under the Exchange Act may be terminated upon the Company's application to the SEC if the Shares are not listed on a national securities exchange and there are fewer than 300 record holders of Shares. Ninety days after the filing of Form 15 in connection with the completion of the merger or such shorter period as may be determined by the SEC, registration of the ADSs and the underlying Shares under the Exchange Act will be terminated and the Company will no longer be required to file periodic reports with the SEC or otherwise be subject to the U.S. federal securities laws, including the Sarbanes-Oxley Act of 2002, applicable to public companies. The Company estimates that the cost of complying with United States federal securities laws, including the Sarbanes-

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Oxley Act of 2002, totaled approximately $1.71 million and $1.81 million for the fiscal years ended March 31, 2016 and March 31, 2017, respectively. As a result of no longer being required to make SEC filings, the Company will no longer incur such costs and expenses. After the completion of the merger, the Company's shareholders will no longer enjoy the rights or protections that the U.S. federal securities laws provide, including reporting obligations for directors, officers and principal securities holders of the Company. Furthermore, following the completion of the merger, the ADS program will terminate.

        Upon completion of the merger, each issued and outstanding Share (other than the Rollover Shares, the Excluded Shares and the Dissenting Shares) will be cancelled in exchange for the right to receive the merger consideration per Share of US$41.20 in cash, without interest and net of any applicable withholding taxes, in accordance with the terms and conditions set forth in the merger agreement. At the effective time of the merger, (i) the Rollover Shares will be cancelled for no consideration and the Rollover Shareholders will subscribe for newly issued shares of Holdco, (ii) the Excluded Shares (including ADSs representing the Excluded Shares) will be cancelled for no consideration, and (iii) the Dissenting Shares will be cancelled and each holder thereof will be entitled to receive only the payment of the fair value of such Dissenting Shares held by them in accordance with the Cayman Islands Companies Law. At the effective time of the merger, each ordinary share of Merger Sub issued and outstanding immediately prior to the effective time of the merger will be cancelled in exchange for one fully paid and non-assessable ordinary share of the surviving company. As a result, current shareholders and ADS holders of the Company, other than Rollover Shareholders, will no longer have any equity interest in, or be shareholders or ADS holders of, the Company upon completion of the merger. Therefore, the Company's shareholders and ADS holders, other than Rollover Shareholders, will not have the opportunity to participate in the earnings and growth of the Company and they will not have the right to vote on corporate matters. Similarly, our current shareholders and ADS holders, other than Rollover Shareholders, will not be exposed to the risk of loss in relation to their investment in the Company.

        At the effective time of the merger, each Company Option that is issued and outstanding immediately prior to the effective time of the merger (whether vested or unvested) will be cancelled and in exchange for the right to receive, as soon as practicable after the effective time of the merger, an amount equal to the product of (a) the total number of Shares issuable under such Company Option immediately prior to the effective time of the merger multiplied by (b) the excess of US$41.20 over the exercise price payable per Share under such Company Option, if any, in cash, without interest and net of any applicable withholding taxes. If the exercise price per Share of any Company Option is equal to or higher than US$41.20, such Company Option will be cancelled for no consideration. In addition, at the effective time of the merger, Company Options held by Mr. Zhang to acquire 500,000 Shares and Company Options held by Ms. Feiyan Huang to acquire 250,000 Shares will be cancelled for no consideration, and in connection therewith, immediately after the closing, Holdco will issue 500,000 ordinary shares of Holdco to Mr. Zhang (or his designated affiliate) and 250,000 ordinary shares of Holdco to Ms. Huang (or her designated affiliate), in each case, for a consideration per share equal to US$12.8902.

        For the maximum amount of cash payments to be received by our directors and executive officers in respect of their Shares and Company Options (excluding Shares and Company Options held by the Rollover Shareholders) upon the completion of the merger, see "—Treatment of Existing Share Options, Including Those Held by Officers and Directors" beginning on page 98.

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Memorandum and Articles of Association of the Surviving Company; Directors and Officers of the Surviving Company

        If the merger is completed, the current memorandum and articles of association of the Company will be replaced in their entirety by the amended and restated memorandum and articles of association of Merger Sub, as in effect immediately prior to the effective time of the merger (except that, at the effective time of the merger, (a) Article I of the memorandum of association of the surviving company shall be amended to read as follows: "The name of the company is iKang Healthcare Group, Inc."; (b) the articles of association of the surviving company shall be amended to refer to the name of the surviving company as "iKang Healthcare Group, Inc."; and (c) the articles of association of the surviving company shall include certain provisions with respect to exculpation and indemnification or advancement of expenses, as required by the merger agreement). In addition, the directors of Merger Sub immediately prior to the effective time of the merger will become the initial directors of the surviving company, and the officers of the Company immediately prior to the effective time of the merger will become the initial officers of the surviving company unless otherwise determined by Parent prior to the effective time of the merger.

Primary Benefits and Detriments of the Merger

        The primary benefits of the merger to the Company's unaffiliated shareholders include, without limitation, the following:

        The primary detriments of the merger to the Company's unaffiliated shareholders include, without limitation, the following:

        The primary benefits of the merger to the Buyer Group include the following:

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        The primary detriments of the merger to the Buyer Group include the following:

Effect of the Merger on the Company's Net Book Value and Net Earnings

        After the closing of the merger, each member of the Buyer Group will have an indirect interest in the Company's net book value and net earnings in proportion to such member's ownership interest in Parent, which will wholly own the surviving company. The Company's net loss attributable to its shareholders for the fiscal year ended March 31, 2017 was approximately US$11 million and its net book value as of March 31, 2017 was approximately US$312 million.

        The table below sets forth the indirect beneficial interest in the Company's net book value and net earnings for each member of the Buyer Group before and after the merger, based on the historical net book value and net earnings of the Company as of and for the fiscal year ended March 31, 2017.

 
  Ownership Prior to the Merger(1)   Ownership After the Merger(2)  
 
  Net Book Value   Net Earnings   Net Book Value   Net Earnings  
Name
  US$'000   %   US$'000   %   US$'000   %   US$'000   %  

YF Fund III

                    67     21.5 %   (2 )   21.5 %

YF Fund III Parallel1

                    27     8.5 %   (1 )   8.5 %

Taobao China

                    99     31.7 %   (4 )   31.7 %

Boyu Fund III

                            41     13.0 %   (1 )   13.0 %

Lee Ligang Zhang(3)(4)(5)

    [38]     12.3 %   [(1 )]   12.3 %   42     13.4 %   (2 )   13.4 %

Boquan He(6)

    [40]     12.9 %   [(1 )]   12.9 %   37     11.9 %   (1 )   11.9 %

(1)
Ownership percentages are based on 34,471,813 Shares issued and outstanding as of June 15, 2018.

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(2)
Ownership percentages are subject to adjustment pursuant to the terms and conditions of the merger agreement, the Equity Commitment Letters and the Support Agreement and are on a fully diluted basis.

(3)
Mr. Zhang's ownership percentage after the Merger is based on (i) 4,224,371 ordinary shares of Holdco to be issued to Mr. Zhang or his affiliates immediately prior to the merger as consideration for the cancellation of the same number of Rollover Shares beneficially held by him, including 2,264,140 Class A Shares and 1,256,820 ADSs held by ShanghaiMed and 526,721 Class A Shares and 805,100 Class C Shares held by Time Intelligent, and (ii) 750,000 ordinary shares of Holdco to be awarded to Mr. Zhang or his wholly owned subsidiary immediately upon the merger for nominal consideration, subject to certain conditions set forth in the Shareholders Agreement Term Sheet attached to the Interim Investors Agreement.

(4)
Pursuant to the Support Agreement, prior to the effective time of the merger, Mr. Zhang or his affiliates are entitled to acquire up to 387,865 Shares from Ms. Feiyan Huang or Gold Partner Consultants Limited and up to 1,384,779 Shares from the directors or employees of the Company other than Ms. Feiyan Huang and Gold Partner Consultants Limited, and such Shares so acquired will be deemed "Rollover Shares" which shall be cancelled for no consideration in the merger in consideration for the same number of ordinary shares of Holdco. The ordinary shares of Holdco mentioned in the preceding sentence are not reflected in Mr. Zhang's ownership percentage after the merger.

(5)
Pursuant to the Support Agreement, immediately after the closing of the merger, Mr. Zhang or his designated affiliate will be issued 500,000 ordinary shares of Holdco, and Ms. Feiyan Huang or her designated affiliate will be issued 250,000 ordinary shares of Holdco, in each case, for a consideration per share equal to US$12.8902. The ordinary shares of Holdco mentioned in the preceding sentence are not reflected in Mr. Zhang's ownership percentage after the merger.

(6)
Pursuant to the Support Agreement, prior to the effective time of the merger, Mr. He or his affiliates are entitled to acquire up to 476,831 Shares from certain directors or employees of the Company, and such Shares so acquired will be deemed "Rollover Shares" which shall be cancelled for no consideration in the merger in consideration for the same number of ordinary shares of Holdco. The ordinary shares of Holdco mentioned in the preceding sentence are not reflected in Mr. He's ownership percentage after the merger.

Plans for the Company after the Merger

        Following completion of the merger, Parent will own 100% of the equity interest in the surviving company. The Buyer Group anticipates that the Company will continue to conduct its operations substantially as they are currently being conducted, except that the Company will cease to be a publicly traded company and will instead be a wholly owned subsidiary of Parent.

        Subsequent to the completion of the merger and the anticipated deregistration of the Company's Class A Shares and ADSs, the Company will no longer be subject to the Exchange Act and NASDAQ compliance and reporting requirements and the related direct and indirect costs and expenses, and may experience positive effects on profitability as a result of the elimination of such costs and expenses.

        Except as set forth in this proxy statement and transactions already under consideration by the Company, the Buyer Group does not have any current plans, proposals or negotiations that relate to or would result in any of the following:

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Alternatives to the Merger

        The Board did not independently determine to initiate a process for the sale of the Company. The Special Committee was formed on September 9, 2015 in response to the receipt of the Buyer Group 1 Proposal on August 31, 2015, and has remained in place since its formation.

        As described in "Special Factors—Background of the merger" beginning on page 28, the Special Committee considered, evaluated and negotiated, with the assistance of its advisors, the Buyer Group 1 Proposed Transaction, the Buyer Group 2 Proposed Transaction, the Company A Proposed Transaction, the Yunfeng Proposed Transaction, and the transactions contemplated by the merger agreement. Each of the Buyer Group 1 Proposal, the Buyer Group 2 Proposal and the Company A Proposal was withdrawn or expired in June 2016 and, thus, was not an alternative to the merger considered by the Special Committee thereafter. The Special Committee and its advisors negotiated with Yunfeng and its advisors from June 2016 through February 2018, which ultimately led to the Yunfeng and Alibaba Proposal received by the Special Committee on February 28, 2018. As further described in "Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board" beginning on page 64, the Special Committee determined that there was no viable sale alternative to the merger in light of (i) the intention of the Rollover Shareholders to work with Alibaba and Yunfeng in pursuing the merger, (ii) the fact that the Rollover Shareholders own Shares representing, in the aggregate, approximately 26.6% of the total issued and outstanding Shares and approximately 44.4% of the total voting power of the total issued and outstanding Shares, and (iii) the fact that, despite the multiple market checks conducted by J.P. Morgan on behalf of the Special Committee, after the withdrawal or expiration of the Buyer Group 1 Proposal, the Buyer Group 2 Proposal and Company A Proposal in June 2016, no party (other than Yunfeng and Alibaba) made any proposal to the Company or the Special Committee, on its own initiative or in response to inquiries by J.P. Morgan on behalf of the Special Committee, with respect to an alternative transaction with the Company.

        The Special Committee also took into account that, the Board may, prior to obtaining the required shareholder approval for the merger, (a) upon the recommendation of the Special Committee, change, withhold, withdraw, qualify or modify its recommendation of the merger to the shareholders of the Company if the Board determines, in its good faith judgment upon the recommendation of the Special Committee, upon advice by its independent legal counsel, that failure to take such action would be inconsistent with its fiduciary obligations to the Company and its shareholders under applicable law, and/or (b) in connection with a superior proposal, authorize the Company to terminate the merger agreement, approve or recommend such superior proposal to the Company's shareholders, and enter into or execute an alternative merger agreement, if (i) the Company receives an unsolicited, bona fide written proposal or offer regarding a competing transaction, (ii) the Board determines, in its good faith judgment upon the recommendation of the Special Committee (upon advice by its financial advisor and independent legal counsel) that such competing transaction constitutes a superior proposal and failure to take such action with respect to such superior proposal would be inconsistent with its fiduciary obligations to the Company and its shareholders under applicable law, in each case, subject to conditions set forth in the merger agreement, and (iii) the Company pays Parent a termination fee equal to US$37,000,000. In this regard, the Special Committee recognized that it has flexibility under the merger agreement to respond to an alternative transaction proposed by a third party that is or is reasonably likely to result in a superior proposal, including the ability to provide information to and engage in discussions and negotiations with such party (and, if such proposal is a superior proposal,

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change its recommendation of the merger to the Company's shareholders and terminate the merger agreement, subject to payment of the Company termination fee to Parent).

        In addition, the Special Committee and the Board considered, as an alternative to the merger, remaining as a public company. However, based on the considerations set forth in the section entitled "Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board" beginning on page 64, the Special Committee and the Board have concluded that it is more beneficial to the unaffiliated shareholders to enter into the merger agreement and pursue the consummation of the transactions contemplated by the merger agreement, including the merger, and become a private company rather than to remain a public company.

Effects on the Company if the Merger Is Not Completed

        If the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, are not authorized and approved by the shareholders of the Company or if the merger is not completed for any other reason, the shareholders or ADS holders of the Company will not receive any payment for their Shares or ADSs pursuant to the merger agreement, nor will the holders of any Company Options receive any payment pursuant to the merger agreement. In addition, the Company will remain a publicly traded company, the ADSs will continue to be listed and traded on NASDAQ, provided that the Company continues to meet NASDAQ's listing requirements, and the Company will remain subject to SEC reporting obligations. Therefore, the Company's shareholders and ADS holders will continue to be subject to similar risks and opportunities as they currently are with respect to their ownership of the Shares and ADSs. Accordingly, if the merger is not completed, we cannot assure you as to the effect of these risks and opportunities on the future value of the Shares or ADSs, including the risk that the market price of the ADSs may decline to the extent that the current market price reflects a market assumption that the merger will be completed.

        Under specified circumstances in which the merger agreement is terminated, the Company may be required to pay Parent a termination fee in an amount equal to US$37,000,000, or Parent may be required to pay the Company a termination fee in an amount equal to US$74,000,000, in each case, as described under the caption "The Merger Agreement—Termination Fee" beginning on page 137.

        If the merger is not completed, the Board will, from time to time, evaluate and review, among other things, the business, operations, dividend policy and capitalization of the Company and make such changes as are deemed appropriate and continue to seek to identify strategic alternatives to enhance shareholder value. If the merger agreement is not approved by the shareholders or if the merger is not completed for any other reason, we cannot assure you that any other transaction acceptable to the Company will be offered, or that the business, prospects or results of operations of the Company will not be adversely impacted.

Financing of the Merger

        The Company and the Buyer Group estimate that the total amount of funds necessary to complete the merger and the related transactions, including payment of fees and expenses in connection with the merger, is approximately US$1.15 billion, assuming no exercise of dissenters' rights by shareholders of the Company. In calculating this amount, the Company and the Buyer Group do not consider the value of the Rollover Shares, which will be cancelled for no consideration in the merger. For additional information regarding such cancellation, please see "The Merger Agreement—Merger Consideration" beginning on page 120.

        The Buyer Group expects to provide this amount through a combination of (i) cash contributions contemplated by the Equity Commitment Letters and (ii) rollover financing comprised of Rollover Shares, details of which are discussed below. As of the date of this proxy statement, there are no

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alternative financing arrangements or plans in place to acquire the funds necessary for the merger and the other transactions contemplated by the merger agreement.

Equity Financing

        The merger and the other transactions contemplated by the merger agreement are expected to be funded primarily through cash contributions contemplated by the Equity Commitment Letters, by and between Parent and each of YF Fund III, YF Fund III Parallel, Taobao China and Boyu Fund III, respectively. Under the terms and subject to the conditions of the Equity Commitment Letters, YF Fund III, YF Fund III Parallel, Taobao China and Boyu Fund III have committed to provide equity financing in an aggregate amount of approximately US$1.15 billion to Parent to complete the merger.

        Pursuant to the Equity Commitment Letters, YF Fund III, YF Fund III Parallel, Taobao China and Boyu Fund III have committed (on a several and not joint or joint and several basis) to, at or immediately prior to the effective time of the merger, subject to the terms and conditions therein, purchase, directly or indirectly, equity securities of Parent and to pay, or cause to be paid, to Parent cash purchase prices equal to US$330,056,497, US$129,943,503, US$485,660,389 and US$200,000,000, respectively. Such funds are to be used by Parent solely for the purpose of funding the merger consideration and such other amounts required to be paid by Parent under the merger agreement, together with fees and expenses (other than the Parent termination fee and the payment obligations guaranteed by the Limited Guarantees).

        Each Sponsor's equity commitment under its Equity Commitment Letter is conditioned upon: (a) the satisfaction or waiver of the closing conditions set forth in Section 7.01 and Section 7.02 of the merger agreement (other than conditions that are to be satisfied at the closing, but subject to the satisfaction of such conditions); (b) the substantially contemporaneous funding to Parent of the other equity contributions contemplated by the other Equity Commitment Letters (provided that this condition shall not limit or impair the ability of Parent or the Company to seek enforcement of such Sponsor's equity commitment if Parent or the Company, as applicable, is also seeking enforcement of the other Equity Commitment Letters); and (c) it being manifestly apparent that, upon the funding of the equity commitments under all of the Equity Commitment Letters, and assuming the satisfaction or waiver of the closing conditions set forth in Section 7.03 of the merger agreement, the substantially contemporaneous consummation of the closing of the merger will occur in accordance with the merger agreement.

        Each Equity Commitment Letter and the obligation of the relevant Sponsor to fund its equity commitment thereunder will terminate automatically and immediately upon the earliest to occur of: (a) the valid termination of the merger agreement in accordance with its terms (unless the Company has made a valid claim to seek specific performance of the obligations to Parent and Merger Sub to effect the closing of the merger, in which case such Equity Commitment Letter shall terminate upon a final, non-appealable judicial or arbitral determination or a written settlement between the Company, Parent and Merger Sub with respect to such claim, and the subsequent satisfaction by Sponsor of any obligations under such Equity Commitment Letter as so finally determined or agreed); (b) the closing of the merger and payment by Parent and Merger Sub of all amounts due by them under the merger agreement, at which time such obligation will be discharged; and (c) the Company or any of its affiliates asserting a claim in any proceeding relating to such Equity Commitment Letter that would make the Limited Guarantee provided by such Sponsor terminable in accordance with the terms thereof.

        The Company is entitled to enforce each Equity Commitment Letter to seek specific performance of the relevant Sponsor's obligation to fund its equity commitment to the extent permitted by the merger agreement and subject to the conditions to such Sponsor's funding obligation under such Equity Commitment Letter, and the Company is an express third-party beneficiary of each of the Equity

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Commitment Letters to the extent of such specific performance rights. Each of the Sponsors may assign or delegate all or a portion of its obligations to fund its equity commitment under the relevant Equity Commitment Letter to any of its affiliates or any other investment fund advised or managed by such Sponsor or its affiliate so long as such Sponsor remains liable for the obligations under such Equity Commitment Letter. Any amendment or modification to, or waiver of any rights under, any Equity Commitment Letter that would be expected to be adverse to the Company's rights set forth therein requires the prior consent of the Company.

        Pursuant to the Merger Agreement, each of Parent and Merger Sub is required to use its reasonable best efforts to take all actions necessary, proper or advisable to obtain equity financing on the terms and conditions described in the Equity Commitment Letters, including by (a) maintaining in effect, without amendment, modification or waiver, each of the Equity Commitment Letters, (b) satisfying on a timely basis all conditions to the closing of and funding under the Equity Commitment Letters applicable to Parent and/or Merger Sub that are within its control, (c) consummating the equity financing contemplated by each of the Equity Commitment Letters at or prior to the closing and prior to the effective time of the merger, and (d) enforcing the relevant parties' funding obligations and the rights of Parent and Merger Sub under the Equity Commitment Letters to the extent necessary to fund the merger consideration.

        If any portion of the financing becomes unavailable on the terms and conditions contemplated by the Equity Commitment Letters, Parent and Merger Sub will promptly notify the Company in writing and Parent and Merger Sub will use their reasonable best efforts to obtain alternative debt financing and/or equity financing as promptly as practicable following the occurrence of such event, so long as (a) the aggregate proceeds of the equity financing under the Equity Commitment Letters (as amended or modified in accordance with their terms) and any alternative debt financing and/or equity financing will be sufficient for Parent and Merger Sub to pay the merger consideration and any other amounts required to be paid in connection with the completion of the transactions contemplated by the merger agreement, and (b) such amendment or modification or such alternative debt financing and/or equity financing (i) does not impose new or additional conditions compared to those in each of the Equity Commitment Letters as of the date of the merger agreement, (ii) would not prevent or materially delay the completion of the transactions contemplated by the merger agreement or materially impair the ability of Parent or Merger Sub to complete such transactions, and (iii) does not involve any change, terms or conditions that would adversely impact the ability of Parent and Merger Sub to enforce their rights against the providers of such equity financing or such alternative debt financing and/or equity financing. If Parent becomes aware of the existence of any fact or event that would reasonably be expected to cause any portion of the equity financing to become unavailable on the terms and conditions contemplated by the Equity Commitment Letters in effect on the date of the merger agreement, Parent and Merger Sub will use their reasonable best efforts to either cure or eliminate such fact or event, or to arrange and obtain alternative debt financing and/or equity financing. Parent will deliver to the Company as promptly as practicable (and within three business days) after their execution, true and complete copies of all contracts or other arrangements pursuant to which any such alternative sources have committed to provide such alternative debt financing and/or equity financing.

Rollover Equity

        Concurrently with the execution and delivery of the merger agreement, the Rollover Shareholders and the Beneficial Owners entered into a support agreement, dated as of March 26, 2018 (as amended on May 29, 2018, and as may be further amended from time to time, the "Support Agreement") with Holdco and Parent. Pursuant to the Support Agreement, subject to the terms and conditions therein, (i) 2,264,140 Class A Shares and 1,256,820 ADSs held by ShanghaiMed (representing approximately 8.4% of the total issued and outstanding Shares as of the date of this proxy statement, and an aggregate value of approximately US$119,173,060 at the per share merger consideration), (ii) 526,721

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Class A Shares and 805,100 Class C Shares held by Time Intelligent (representing approximately 3.9% of the total issued and outstanding Shares as of the date of this proxy statement, and an aggregate value of approximately US$54,871,025.20 at the per share merger consideration), (iii) 4,448,575 Class A Shares held by Top Fortune (representing approximately 12.9% of the total issued and outstanding Shares as of the date of this proxy statement, and an aggregate value of approximately US$183,281,290 at the per share merger consideration), and (iv) the fully vested Company Options to purchase 10,000 Class A Shares held by Mr. He (representing an aggregate value of US$283,098, the excess of the per share merger consideration over the per share exercise price of such Company Options), will be cancelled at the closing of the merger for no consideration from the Company. Immediately prior to the closing, in consideration for such cancellation of such Rollover Shareholder's Rollover Shares, Holdco will issue to each Rollover Shareholder (or its affiliates) a number of ordinary shares of Holdco equal to the number of its Rollover Shares, for a consideration per share equal to the par value of such Holdco shares. The Support Agreement also provides that, prior to the effective time of the merger, (a) Mr. Zhang or his affiliates may acquire additional Shares or ADSs that are beneficially owned by directors or employees of the Company (including Shares and ADSs resulting from the exercise of Company Options by such persons), subject to (i) a cap equal to 387,865 Shares for the acquisition from Ms. Feiyan Huang or Gold Partner Consultants Limited and (ii) a cap equal to 1,384,779 Shares for the acquisition from such persons other than Ms. Feiyan Huang or Gold Partner Consultants Limited, and (b) Mr. He or his affiliates may acquire additional Shares that are beneficially owned by certain directors or employees of the Company (including Shares resulting from the exercise of Company Options by such person), subject to a cap equal to 476,831 Shares, and such Shares will be deemed "Rollover Shares" and be cancelled for no consideration in the merger in consideration for the same number of newly issued ordinary shares of Holdco.

        The consummation of the issuance of ordinary shares of Holdco described above is subject to the satisfaction in full (or waiver) of each of the conditions to Parent's and Merger Sub's obligations to complete the merger under the merger agreement.

Limited Guarantees

        The Company and each of the respective Guarantors, namely ShanghaiMed, Top Fortune, YF Fund III, YF Fund III Parallel, Taobao China and Boyu Fund III, entered into a Limited Guarantee, pursuant to which such Guarantor has, subject to the terms and conditions therein, guaranteed in favor of the Company a portion of the payment obligations of Parent under the merger agreement for (a) the US$74,000,000 termination fee, (b) certain costs and expenses in connection with the collection of such termination fee that may become payable to the Company by Parent in accordance with the merger agreement and (c) the indemnity provided by Parent in connection with the arrangement of financing as described under "The Merger Agreement—Financing."

Support Agreement

        The Rollover Shareholders and the Beneficial Owners entered into the Support Agreement with Parent and Holdco, pursuant to which, upon the terms and subject to the conditions therein and among other things:

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        The Support Agreement will terminate immediately upon the earliest to occur of (a) the closing of the merger, (b) the termination of the merger agreement in accordance with its terms and (c) failure to cure any material breach by Parent under the Support Agreement with respect to matters relating to

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Founder's Rollover Shares or subscription of ordinary shares of Holdco within 30 days from such breach.

        The Support Agreement is attached as Annex E to this proxy statement and is incorporated herein by reference.

Interim Investors Agreement

        Concurrently with the execution and delivery of the merger agreement, the Rollover Shareholders, the Beneficial Owners, the Sponsors (other than Boyu Fund III), Holdco, Parent and Merger Sub entered into the Interim Investors Agreement, dated as of March 26, 2018 (the "March 26 Interim Investors Agreement") which governs the relationship among the parties thereto with respect to the merger agreement and matters relating thereto until the closing of the merger or the earlier termination of the merger agreement. On May 29, 2018, the March 26 Interim Investors Agreement was amended and restated to admit Boyu Fund III as an investor thereunder (such amended and restated Interim Investors Agreement, as may be further amended from time to time, the "Interim Investors Agreement"). The Interim Investors Agreement provides for, among other things and subject to certain limitations or exceptions therein, (i) the mechanism for the Buyer Group to make decisions relating to the merger agreement pending consummation of the merger, (ii) the mechanism for admitting additional investors to the Buyer Group and making adjustments to the Sponsor's equity commitments pending consummation of the merger (subject to the Special Committee's prior consent), (iii) certain fees and expense sharing arrangements among the Buyer Group, and (iv) the obligations of the Rollover Shareholders and the Beneficial Owners to work exclusively with the Sponsors and Mr. Zhang to implement the transactions contemplated by the merger agreement.

Remedies and Limitations on Liability

        The parties to the merger agreement are entitled to an injunction or injunctions to prevent breaches of the merger agreement and to enforce specifically the terms and provisions thereof against the Company, which remedies are in addition to any other remedy to which they are entitled at law or in equity.

        The Company is entitled to an injunction or injunctions, or other appropriate form of specific performance or equitable relief, to cause Parent and Merger Sub to cause the equity financing to be funded if (i) all of Parent and Merger Sub's conditions to their obligations under the merger agreement have been satisfied or waived (other than those conditions that by their terms are to be satisfied at the closing but subject to the satisfaction of waiver of those conditions), (ii) Parent and Merger Sub fail to complete the closing by the date the closing is required to have occurred under the merger agreement, and (iii) the Company has irrevocably confirmed in writing that, if specific performance is granted and the equity financing (or if applicable, alternative financing) is funded, then the Company is ready, willing and able to take all actions within its control to consummate the closing. The Company has third party beneficiary rights under the Equity Commitment Letter provided by each of the Sponsors which permit the Company to directly enforce the funding obligations of such Sponsor thereunder under the foregoing circumstances, subject to the terms and conditions of the Equity Commitment Letter.

        In the event that Parent or Merger Sub fails to consummate the closing of the merger or otherwise breaches the merger agreement or fails to perform thereunder, the Company has the right to receive payment of a termination fee equal to US$74,000,000 from Parent as well certain costs and expenses payable pursuant to the merger agreement. The Company has the right to directly enforce the Limited Guarantee provided by each of the Guarantors which guarantees to the Company the payment of such Guarantor's share of the Parent termination fee in the event that Parent fails to pay this amount to the Company when due.

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        While the Company, Parent and Merger Sub may pursue both a grant of specific performance and payment of a termination fee, none of them will be permitted or entitled to receive both a grant of specific performance that results in the completion of the merger and payment of a termination fee, and if the merger agreement is terminated, the remedy of specific performance will no longer be available to any of the parties to the merger agreement.

Interests of Certain Persons in the Merger

        In considering the recommendation of the Special Committee and the Board with respect to the merger, you should be aware that each member of the Buyer Group has interests in the transaction that are different from, and/or in addition to, the interests of the Company's shareholders generally. The Board and Special Committee were aware of such interests and considered them, among other matters, in reaching their decisions to authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, and recommend that the Company's shareholders vote in favor of authorizing and approving the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger.

Interests of the Buyer Group

        As the result of the merger, Parent will own 100% of the equity interests of the surviving company immediately following the completion of the merger. Assuming the Founder Parties and the Mr. He Parties do not increase their respective number of Rollover Shares in accordance with the Support Agreement, Taobao China, YFC, Boyu Fund III, the Founder Parties and Mr. He Parties will hold approximately 32.30%, 30.60%, 13.30%, 11.58% and 12.22%, respectively, of the equity interests of Holdco immediately following the completion of the merger. Because Parent will directly own all of the equity interests of the surviving company immediately following the completion of the merger, each member of the Buyer Group will directly or indirectly enjoy the benefits from any future earnings and growth of the Company after the merger which, if the Company is successfully managed, could exceed the value of their original investments in the Company. Parent will also directly bear the corresponding risks of any possible decreases in the future earnings, growth or value of the Company. Parent's investment in the surviving company will be illiquid, with no public trading market for the surviving company's shares and no certainty that an opportunity to sell its shares in the surviving company at an attractive price, or that dividends paid by the surviving company will be sufficient to recover its investment.

        The merger may also provide additional means to enhance shareholder value for the Buyer Group, including improved profitability due to the elimination of the expenses associated with public company reporting and compliance, increased flexibility and responsiveness in management of the business to achieve growth and respond to competition without the restrictions of short-term earnings comparisons and additional means for making liquidity available to the Buyer Group, such as through dividends or other distributions.

Treatment of Existing Share Options, Including Those Held by Officers and Directors

        At the effective time of the merger, the Company will (i) terminate the Company's Share Incentive Plans, and any relevant award agreements applicable to the Share Incentive Plans or otherwise relating to Company Options, and (ii) cancel each Company Option that is outstanding and unexercised, whether or not vested or exercisable. As soon as practicable after the effective time of the merger, each holder of a Company Option that is cancelled at the effective time of the merger will have the right to receive an amount in cash equal to the product of (i) the excess, if any, of US$41.20 over the applicable per share exercise price of such Company Option and (ii) the number of Shares underlying such Company Option, except that Company Options to purchase 500,000 Class A Shares held by

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Mr. Zhang and Company Options to purchase 250,000 Class A Shares held by Ms. Feiyan Huang will be cancelled for no consideration.

        As of the date of this proxy statement, the Company's directors and executive officers, as a group held an aggregate of 9,569,979 Shares and an aggregate of outstanding Company Options to purchase 1,311,750 Shares. As of the date of this proxy statement, the Company's directors and executive officers (excluding Mr. Zhang and Mr. He), as a group held an aggregate of 897,033 Shares and an aggregate of outstanding Company Options to purchase 651,750 Shares.

        The following table shows, as of the date of this proxy statement, for each director and executive officer of the Company, (a) the number of Shares (other than Rollover Shares) owned, (b) the cash payment that will be made in respect of the Shares (other than Rollover Shares) at the effective time of the merger, (c) the number of Shares issuable under the outstanding Company Options held by such person (other than Company Options that will be canceled for no consideration), whether vested or unvested, and the exercise price per Share for such Company Options, (d) the cash payment that will be made in respect of the Company Options held by such person at the effective time of the merger (in all cases before applicable withholding taxes), and (e) the total cash payment that will be made in respect of the outstanding Shares (other than Rollover Shares) and Company Options held by such person.

 
  Shares    
   
   
   
 
 
  Shares
Beneficially
Owned
(Excluding
Rollover
Shares)
   
   
   
   
   
 
 
   
  Company Options(1)  
Name of Directors and
Executive Officers
  Cash Payment
Therefor in
US$
  Shares
Underlying
  Exercise
Price
US$
  Cash Payment
Therefor in
US$
  Total Cash
Payments in
US$
 

Lee Ligang Zhang

    0     0     150,000     5.1288     5,410,680.00     5,410,680.00  

Boquan He

    0     0     0     12.8902     0     0.00  

Feiyan Huang

    387,865     15,980,038.00     0     12.8902     0     15,980,038.00  

Minjian Shi

    466,831     19,233,437.20     10,000     12.8902     283,098.00     19,516,535.20  

Ruby Lu

    0     0     10,000     12.8902     283,098.00     283,098.00  

Thomas McCoy Roberts

    17,600     725,120.00     10,000     32.9200     82,800.00     807,920.00  

Daqing Qi

    0     0     10,000     12.8902     283,098.00     283,098.00  

Man Ho Kee Harry

    0     0     10,000     12.8902     283,098.00     283,098.00  

Gavin Zhengdong Ni

    0     0     10,000     12.8902     283,098.00     283,098.00  

Yang Chen

    0     0     100,000     12.8902     2,830,980.00     2,830,980.00  

Yafang Zhou

    24,736     1,019,143.80     30,000     6.4224     1,043,329.00     2,062,493.40  

Elmer Liu

    0     0     20,000     12.8902     566,196.00     566,196.00  

Jinfeng Pan

    0     0     111,750     7.9069     3,720,500.60     3,720,500.60  

Hua Liu

    0     0     40,000     12.8902     1,132,392.00     1,132,392.00  

Xiaojiang Zhou

    0     0     40,000     12.8902     1,132,392.00     1,132,392.00  

All directors and executive officers as a group

    897,033     36,957,739.00     551,750     9.7822     17,334,759.60     54,292,498.60  

(1)
Excludes Company Options with an exercise price which is equal to or higher than US$41.20 per Share.

        After the consummation of the merger, the maximum amount of cash payments our directors and executive officers may receive in respect of their Shares (other than Rollover Shares) and Company Options is approximately US$54.29 million, including approximately US$36.96 million in respect of Shares (other than Rollover Shares), and approximately US$17.33 million in respect of Company Options.

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Indemnification and Insurance

        Pursuant to the merger agreement, the parties to the merger agreement have agreed that:

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The Special Committee

        On September 9, 2015, the Board established a special committee of independent and disinterested directors to, among other things, consider the Buyer Group 1 Proposal and take any actions it deems appropriate to assess the fairness and viability of such proposal. The Special Committee has remained in place since its formation and has considered, evaluated and negotiated, with the assistance of its advisors, the Buyer Group 1 Proposed Transaction, the Buyer Group 2 Proposed Transaction, the Company A Proposed Transaction, the Yunfeng Proposed Transaction, and the transactions contemplated by the merger agreement, which led to the approval of the transactions contemplated by the merger agreement by the Special Committee and the Board on March 26, 2018.

        The Special Committee consists of three independent and disinterested directors, Ms. Ruby Lu, Professor Daqing Qi and Mr. Gavin Zhengdong Ni. None of the three directors are affiliated with the Buyer Group or any member of the management of the Company, and none of the three directors has any financial interest in the merger that is different from that of the unaffiliated shareholders, other than (i) the directors' receipt of Board compensation in the ordinary course and the Special Committee members' compensation in connection with its evaluation of the merger (none of which is contingent upon the completion of the merger or the Special Committee's or Board's recommendation of the merger) and (ii) the directors' indemnification and liability insurance rights under the merger agreement. The Board did not place any limitations on the authority of the Special Committee regarding its investigation and evaluation of the merger.

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        We compensate the members of the Special Committee in exchange for their service in such capacity at monthly rates of US$20,000 per month to Ms. Ruby Lu, chairperson of the Special Committee, US$18,000 per month to Professor Daqing Qi, vice-chairperson of the Special Committee, and US$12,000 per month to Mr. Gavin Zhengdong Ni, member of the Special Committee (the payments of which are not contingent upon the completion of the merger or the Special Committee's or Board's recommendation of the merger).

Position with the Surviving Company

        The directors of Merger Sub immediately prior to the effective time will become the directors of the surviving company, and the officers of the Company immediately prior to the effective time will become the officers of the surviving company, in each case, unless otherwise determined by Parent prior to the effective time.

Related Party Transactions

        We have adopted an audit committee charter, which requires the audit committee to review and approve all related-party transactions as defined in Item 404 of Regulation S-K on an ongoing basis. In addition to the arrangements in connection with the merger discussed elsewhere in this proxy statement, for a description of significant related-party transactions for the fiscal years ended March 31, 2016 and 2017, see "Item 7. Major Shareholders and Related Party Transactions" included in the Company's Annual Reports on Form 20-F for the fiscal years ended March 31, 2016 and March 31, 2017, respectively, which are incorporated by reference into this proxy statement. See "Where You Can Find More Information" beginning on page 153 for a description of how to obtain copies of the Company's Annual Reports.

Related-Party Transactions since March 31 2017

Formation of Investment Funds with China Industrial Asset Management

        In July 2017, the Company, iKang Healthcare Technology Group Co., Ltd. (formerly known as Shanghai iKang Guobin Holding Co., Ltd., "iKang Holding"), China Industrial Asset Management Limited ("China Industrial Asset Management"), an affiliate of Mr. Zhang and an affiliate of China Industrial Asset Management entered into a cooperation agreement to form certain healthcare investment funds to invest in medical centers. The aggregate size of the healthcare investment funds will not exceed RMB502 million. The affiliate of Mr. Zhang and the affiliate of China Industrial Asset Management will act as general partners and each contribute RMB1 million to the investment funds. The Company and China Industrial Asset Management will each contribute up to RMB50 million to the investment funds as limited partners. The investment funds will admit other limited partners which will contribute up to RMB400 million. Pursuant to the arrangements, the investment funds will either set up new medical centers or acquire existing medical centers. After operating these medical centers for a period of at least two years, the investment funds will transfer their interests in these medical centers to us at a price equal to their original costs with an annual return rate of 15%.

Increase of Registered Capital of Beijing iKang Medical Examination Application Technology Co., Ltd.

        In July 2017, Beijing iKang Medical Examination Application Technology Co., Ltd., which was a wholly-owned subsidiary of iKang Holding, increased its registered capital to RMB10 million. After the increase of registered capital, iKang Holding, an affiliate of Mr. Zhang and an entity controlled by certain of the Company's employees hold a 70%, 20% and 10% equity interest, respectively, in Beijing iKang Medical Examination Application Technology Co., Ltd.

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Increase of Registered Capital of Yalong Daoyi

        In August 2017, Shanghai Yalong Daoyi Services Co., Ltd. ("Yalong Daoyi"), which was a wholly-owned subsidiary of iKang Holding, increased its registered capital to RMB30 million. After the increase of registered capital, iKang Holding, an affiliate of Mr. Zhang and an entity controlled by certain of the Company's employees hold a 70%, 20% and 10% equity interest, respectively, in Yalong Daoyi.

Fees and Expenses

        Fees and expenses incurred or to be incurred by the Company and the Buyer Group in connection with the merger are estimated at the date of this proxy statement to be as follows:

Description
  Amount
(US$)
 

Financing fees and expenses and other professional fees

  $ ·  

Legal fees and expenses

  $ ·  

Special Committee fees

  $ ·  

Miscellaneous (including accounting, filing fees, printer, proxy solicitation and mailing costs)

  $ ·  

ADS cancellation and surrender fees

  $ ·  

Total

  $ ·  

        These fees and expenses will not reduce the aggregate merger consideration to be received by the Company shareholders and ADS holders. Whether or not the merger is consummated, all costs and expenses incurred in connection with the merger agreement, the plan of merger and the merger, will be paid by the party incurring such costs and expenses except as otherwise stated in the section entitled "The Merger Agreement and Plan of Merger—Termination Fee" and as provided in the Interim Investors Agreement.

Voting by the Buyer Group at the Shareholders' Meeting

        Each of the Rollover Shareholders has agreed, until the closing of the merger or the earlier termination of the merger agreement in accordance with its terms, at the Shareholders' Meeting (as defined in the section entitled "The Merger Agreement—Company Shareholders' Meeting") to cause its Shares (including Shares represented by ADSs) to be counted as present for purposes of determining whether a quorum is present and vote or otherwise cause to be voted all of its Shares:

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        As of the date of this proxy statement, the Rollover Shareholders own an aggregate of 9,332,946 Shares, which represent approximately 26.6% of the Company's issued and outstanding Shares and 20,604,346 votes, or approximately 44.4% of the total number of votes represented by the Company's issued and outstanding Shares (excluding, for purposes of this calculation, Shares issuable upon the exercise of Company Options).

Litigation Relating to the Merger

        The Company is not aware of any lawsuit that challenges the merger agreement, the plan of merger or any of the transactions contemplated by the merger agreement, including the merger.

Accounting Treatment of the Merger

        The merger is expected to be accounted for, at historical cost, as a merger of entities under common control in accordance with Accounting Standards Codification 805-50, "Business Combinations—Related Issues."

Regulatory Matters

        The Company does not believe that any material federal or state regulatory approvals, filings or notices are required in connection with the merger other than the approvals, filings or notices required under the federal securities laws, any approvals, filings or notices which may apply under applicable PRC law, and the filing of the plan of merger (and supporting documentation as specified in the Cayman Islands Companies Law) with the Cayman Registrar and, in the event the merger becomes effective, a copy of the certificate of merger being given to the shareholders and creditors of the Company and merger Sub as at the time of the filing of the plan of merger and notice of the merger being published in the Cayman Islands Government Gazette.

Dissenters' Rights

        Registered holders of the Shares who exercise dissenters' rights will have the right to receive payment of the fair value of their Shares in accordance with Section 238 of the Cayman Islands Companies Law if the merger is consummated, but only if they deliver to the Company, before the vote to authorize and approve the merger is taken at the extraordinary general meeting, a written objection to the merger and subsequently comply with all procedures and requirements of Section 238 of the Cayman Islands Companies Law for the exercise of dissenters' rights, a copy of which is attached as Annex D to this proxy statement. The fair value of their Shares as determined under the Cayman Islands Companies Law could be more than, the same as, or less than the merger consideration they would receive pursuant to the merger agreement if they do not exercise dissenters' rights with respect to their Shares. These procedures are complex and you should consult your Cayman Islands legal counsel. If you do not fully and precisely satisfy the procedural requirements of the Cayman Islands Companies Law, you will lose your dissenters' rights (as described under the section entitled "Dissenters' Rights" on page 140).

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Material PRC Income Tax Consequences

        Under the EIT Law, which took effect on January 1, 2008 and was amended on December 24, 2017, enterprises established outside of China whose "de facto management bodies" are located in the PRC are considered "resident enterprises," and thus will generally be subject to the enterprise income tax at the rate of 25% on their global income. On December 6, 2007, the State Council adopted the Regulation on the Implementation of the EIT Law, which became effective on January 1, 2008 and defines the "de facto management body" as an establishment that has substantial management and control over the business, personnel, accounts and properties of an enterprise. The State Administration of Taxation issued the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies ("Circular 82") on April 22, 2009. Circular 82 provides certain specific criteria for determining whether the "de facto management body" of a Chinese-controlled offshore incorporated enterprise is located in China. Under the EIT Law and its implementation regulations, the PRC enterprise income tax at the rate of 10% is applicable to any gain recognized on receipt of consideration by a "non-resident enterprise" from transfer of its equity in a PRC resident enterprise, which is considered PRC-sourced income, provided that the "non-resident enterprise" does not have a de facto management body in the PRC. Under the PRC Individual Income Tax Law, an individual who disposes a capital asset in China is subject to PRC individual income tax at the rate of 20%. Relief from these taxes may be sought under applicable Income Tax Treaties with China.

        The Company does not believe that it is a resident enterprise defined and regulated by the aforesaid regulations or that the gain recognized on the receipt of cash consideration for your Share should otherwise be subject to PRC income tax to holders of such Shares that are not PRC residents as none of our shareholders is a PRC company or PRC corporate group. However, as there has not been a definitive determination of the Company's status by the PRC tax authorities, the Company cannot confirm whether it would be considered a PRC resident enterprise under the EIT Law or whether the gain recognized on the receipt of cash consideration for Shares would otherwise be subject to PRC tax to holders of such Shares that are not PRC tax residents.

        In addition, the Circular Concerning Various Questions on the Administration of Enterprises Income Tax on Non-resident Enterprises ("Bulletin 24") issued by the State Administration of Taxation, which became effective as of April 1, 2011, the Bulletin on Certain Issues Relating to Indirect Transfer of Assets by Non-resident Enterprises ("Bulletin 7") issued by the State Administration of Taxation, which became effective on February 3, 2015, and the Announcement of the State Administration of Taxation on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises ("Bulletin 37") issued by the State Administration of Taxation, which became effective on December 1, 2017, if any non-resident enterprise transfers equity of a resident enterprise, the non-resident enterprise will be subject to a 10% PRC enterprise income tax on the gain from such equity transfer, however, such provision is not applicable to the transfer of listed shares where the number of shares to be transferred and the transfer price are determined pursuant to standard trading rules of a public security market and not by the purchaser and the seller by mutual agreement prior to such transactions. According to Bulletin 24, Bulletin 7 and Bulletin 37, where a non-resident enterprise indirectly holds and transfers equity of a PRC resident enterprise held through an offshore holding company, a list of factors set out by Bulletin 7 should be taken into consideration to assess whether the transfer arrangement would be deemed as having a reasonable commercial purpose. Where non-resident enterprises indirectly transfer PRC resident enterprises' equity and avoid obligations to pay enterprise income tax through arrangement without a reasonable commercial purpose, PRC taxation authorities have the power to redefine and deem the transaction as a direct transfer of PRC resident enterprises' equity and impose a 10% enterprise income tax on the gain from such offshore share transfer. Bulletin 7 or Bulletin 37 may be determined by the PRC tax authorities to be applicable to the merger where non-PRC resident corporate shareholders or ADS holders were involved, if the merger is determined

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by the PRC tax authorities to lack reasonable commercial purpose. As a result, if PRC tax authorities were to invoke Bulletin 7 or Bulletin 37 and impose tax on the receipt of consideration for Shares or ADSs, then any gain recognized on the receipt of consideration for such Shares or ADSs pursuant to the merger by the Company's non-PRC resident shareholders could be treated as PRC-source income and thus be subject to PRC income tax at a rate of 10% (subject to applicable treaty relief if any).

        You should consult your own tax advisor for a full understanding of the tax consequences of the merger to you, including any PRC tax consequences.

Material Cayman Islands Tax Consequences

        The Cayman Islands currently have no form of income, corporate or capital gains tax and no estate duty, inheritance tax or gift tax. No taxes, fees or charges will payable (either by direct assessment or withholding) to the government or other taxing authority in the Cayman Islands under the laws of the Cayman Islands in respect of the merger or the receipt of cash for Shares and ADSs under the terms of the merger. This is subject to the qualifications that (i) Cayman Islands stamp duty may be payable if any original transaction documents are brought into or executed or produced before a court in the Cayman Islands (for example, for enforcement), (ii) registration fees will be payable to the Cayman Registrar to register the plan of merger, and to file the variation of capital and the amendment of M&A and (iii) fees payable to the Cayman Islands Government Gazette Office to publish the notice of the merger in the Cayman Islands Government Gazette.

Material U.S. Federal Income Tax Consequences

        The following are certain material U.S. federal income tax consequences to a U.S. Holder described below of the exchange of our Shares or ADSs for cash pursuant to the merger. This discussion applies to you only if you are a U.S. Holder that holds Shares or ADSs as capital assets for U.S. federal income tax purposes and it does not describe all of the tax consequences that may be relevant in light of your particular circumstances, including alternative minimum tax or Medicare contribution tax consequences, and tax consequences applicable to U.S. Holders subject to special rules, such as:

        If an entity that is classified as a partnership for U.S. federal income tax purposes owns Shares or ADSs, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. If you are a partnerships owning Shares or ADSs or a

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partner therein, you should consult your tax adviser as to the particular U.S. federal income tax consequences applicable to you of disposing of Shares or ADSs.

        This discussion does not apply to you if you hold Excluded Shares or Company Options cancelled pursuant to the merger.

        This discussion is based on the Internal Revenue Code of 1986, as amended (the "Code"), administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations, all as of the date hereof and all of which are subject to change, possibly with retroactive effect. You should consult your tax adviser concerning the U.S. federal, state, local and non-U.S. tax consequences of owning and disposing of Shares or ADSs in your particular circumstances.

        For purposes of this discussion, you are a "U.S. Holder" if you are a beneficial owner of Shares or ADSs that is, for U.S. federal income tax purposes:

        Exchange of Shares or ADSs for Cash.    The exchange of our Shares or ADSs for cash will be a taxable transaction for U.S. federal income tax purposes. You will recognize gain or loss on the disposition of Shares or ADSs, equal to the difference between the amount of cash received, if any, and your tax basis in the Shares or ADSs disposed of. Subject to the discussion in "—Passive Foreign Investment Company" below, any gain or loss recognized will be capital gain or loss, and will be long-term capital gain or loss if you have held the Shares or ADSs for more than one year. The deductibility of capital losses is subject to limitations.

        As described in "Material PRC Income Tax Consequences," above, if we were deemed to be a tax resident enterprise under PRC tax law, gains from a sale of our Shares or ADSs could be subject to PRC tax. You are entitled to use foreign tax credits to offset only the portion of your U.S. federal income tax liability that is attributable to foreign-source income. Because under the Code capital gains of U.S. persons generally are treated as U.S.-source income, this limitation may preclude you from claiming a credit for all or a portion of any PRC taxes imposed on any gain from the sale of our Shares or ADSs. However, if you are eligible for the benefits of the income tax treaty between the United States and the PRC, you may be able to elect to treat any such gain as foreign-source for foreign tax credit purposes. The rules governing the foreign tax credit are complex. You should consult your tax adviser regarding your eligibility for benefits under the income tax treaty between the United States and the PRC and the creditability of any PRC tax on disposition gains in your particular circumstances.

        Passive Foreign Investment Company.    In general, a foreign corporation will be a PFIC for any taxable year in which (1) 75% or more of its gross income consists of passive income (such as dividends, interest, rents royalties and certain gains) or (2) 50% or more of the average quarterly value of its assets consists of assets that produce, or are held for the production of, passive income. If a corporation owns at least 25% (by value) of the stock of another corporation, the corporation will be treated, for purposes of the PFIC tests, as owning its proportionate share of the 25%-owned corporation's assets and receiving its proportionate share of the 25%-owned corporation's income.

        Based upon the nature of our business and estimates of the value of our assets, including goodwill, which are based, in part, on the market price of our ADSs, we do not expect to be a PFIC for our current taxable year. However, it is not entirely clear how the contractual arrangements between our wholly owned subsidiaries, our affiliated PRC entities and the shareholders of our affiliated PRC

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entities will be treated for purposes of the PFIC rules. In addition, we hold a substantial amount of cash, and our PFIC status for any taxable year may depend on the proportionate value of such cash and other passive assets compared to the total market value of our assets. Because the treatment of the contractual arrangements is not entirely clear, because we have, and expect to continue to have, a substantial amount of cash and other passive assets, and because the determination of whether we are a PFIC will depend on the character of our income and assets and the value of our assets from time to time, which may be based in part on the market price of our ADSs, which is likely to fluctuate, we may be a PFIC for the current taxable year.

        If we were a PFIC for this or a previous taxable year and any of our subsidiaries or other entities in which we own or are treated as owning equity interests were also a PFIC (any such entity, a "Lower-tier PFIC"), you would be deemed to own a proportionate amount (by value) of the shares of each Lower-tier PFIC and would be subject to U.S. federal income tax according to the rules described below on (1) certain distributions by a Lower-tier PFIC and (2) dispositions of shares of Lower-tier PFICs, in each case as if you held such shares directly, even though you had not received the proceeds of those distributions or dispositions.

        If we were a PFIC for this or a previous taxable year during which you owned our Shares or ADSs, you may be subject to adverse tax consequences. Generally, any gain that you recognize in the merger would be allocated ratably over your holding period for the Shares or ADSs. The amounts allocated to the current year and to taxable years prior to the first taxable year in which we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest tax rate in effect for that taxable year for individuals or corporations, as appropriate, and an interest charge would be imposed on the tax attributable to the allocated amounts. Furthermore, you would be required to file IRS Form 8621 with respect to us, generally with your federal income tax return for any year for which we were a PFIC. You should consult your tax adviser regarding the consequences of the merger.

        Information Reporting and Backup Withholding.    Payments of the cash consideration for the Shares or ADSs that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (i) you are a corporation or other exempt recipient or (ii) in the case of backup withholding, you provide a correct taxpayer identification number and certify that you are not subject to backup withholding. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to you will be allowed as a credit against your U.S. federal income tax liability, if any, and may entitle you to a refund, provided that the required information is timely furnished to the Internal Revenue Service.

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MARKET PRICE OF THE COMPANY'S ADSs, DIVIDENDS AND OTHER MATTERS

Market Price of the ADSs

        The following table provides the high and low sales prices for ADSs, each representing 1/2 Class A Shares, on NASDAQ under the symbol "KANG," for each quarter during the past two years:

 
  Sales Price
Per ADS
(in US$)
 
 
  High   Low  

Quarterly:

             

2016

             

First quarter

  $ 22.04   $ 19.14  

Second quarter

  $ 22.04   $ 17.23  

Third quarter

  $ 19.18   $ 17.94  

Fourth quarter

  $ 18.56   $ 13.83  

2017

             

First quarter

  $ 18.33   $ 14.69  

Second quarter

  $ 15.21   $ 12.27  

Third quarter

  $ 14.59   $ 11.73  

Fourth quarter

  $ 15.91   $ 13.21  

2018

             

First quarter (through May 29, 2018)

  $ 20.39   $ 19.68  

        On March 9, 2018, the last trading day immediately prior to the Company's announcement on March 12, 2018 that it had received the Yunfeng and Alibaba Proposal, the reported closing price of our ADSs on NASDAQ was US$17.92 per ADS. The merger consideration of US$41.20 per Share, or US$20.60 per ADS, represents a premium of 15.0% over the closing price of US$17.92 per ADS on March 9, 2018, and a premium of 24.7% and 28.5%, respectively, over the Company's 30 and 60 trading day volume-weighted average price as quoted by NASDAQ through March 9, 2018. On May 29, 2018, the most recent practicable date before the date of this proxy statement, the high and low reported sales prices of our ADSs were US$20.30 and US$20.15, respectively. You are urged to obtain a current market price quotation for your Shares in connection with voting your Shares.

Dividend Policy

        The Company neither declared nor paid any dividends in 2015, 2016 or 2017 through the date of this proxy statement to its shareholders, nor does the Company have any present plan to pay any cash dividends on its common shares in the foreseeable future. The Company currently intends to retain the Company's available funds and any future earnings to operate and expand the Company's business.

        Under the terms of the merger agreement, the Company is not permitted to pay any dividends or repurchase any Shares pending consummation of the merger.

        In the event the merger agreement is terminated for any reason and the merger is not consummated, the payment of future dividends will be subject to the discretion of the Board. Even if the Board decides to pay dividends, the form, frequency and amount will depend upon the Company's future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the Board may deem relevant. If the Company pays any dividends, the ADS depositary will distribute such payments to the Company's ADS holders to the same extent as holders of Shares, subject to the terms of the Deposit Agreement, including the fees and expenses payable thereunder. Cash dividends on Shares, if any, will be paid in U.S. dollars. In addition, the Company is a holding company and its current and future ability to pay dividends depends

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substantially on the payment of dividends and other distributions to the Company by its PRC subsidiaries.

        The Company generates substantially all of its revenues through contractual arrangements with its PRC operating companies. PRC governmental authorities may, however, require the Company to amend these contractual arrangements in a manner that would materially and adversely affect the Company's PRC subsidiaries' ability to pay dividends to the Company. If the Company's PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may also restrict the ability of the Company's PRC subsidiaries to pay dividends to the Company. Furthermore, PRC legal restrictions permit payments of dividends by the Company's PRC subsidiaries only out of their retained earnings, if any, determined in accordance with PRC accounting standards and regulations. There is no significant difference between retained earnings as determined in accordance with PRC accounting standards and in accordance with U.S. GAAP. Under PRC law, the Company's PRC subsidiaries are also required to set aside at least 10% of their net income each year to fund their general reserves until the cumulative amount reaches 50% of their paid-in capital. The Company's PRC subsidiaries may also allocate a portion of their net income to their staff welfare and bonus funds. These reserves and welfare and bonus funds are not distributable as cash dividends to the Company. Moreover, cash transfers from the Company's PRC subsidiaries to the Company are subject to the PRC government's currency conversion policy, and the Company's PRC subsidiaries may not be able to obtain the relevant approvals or complete the requisite registrations for distributing dividends to the Company. Any failure by any of the Company's shareholders or any beneficial owner of Shares who is a PRC resident to comply with the approval or registration requirements imposed by the State Administration of Foreign Exchange with respect to their investment in the Company could also subject the Company to legal sanctions, including a restriction on the Company's PRC subsidiaries' ability to distribute dividends to the Company. Furthermore, the Enterprise Income Tax Law eliminates the exemption of enterprise income tax on dividends derived by foreign investors from foreign invested enterprises and imposes on the Company's subsidiaries in China an obligation to withhold tax on dividend distributions to their non-PRC shareholders, provided that such non-PRC shareholders are not classified as resident enterprises.

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THE EXTRAORDINARY GENERAL MEETING

        We are furnishing this proxy statement to you, as a holder of the Shares, as part of the solicitation of proxies by the Board for use at the extraordinary general meeting described below.

Date, Time and Place of the Extraordinary General Meeting

        The extraordinary general meeting will take place on          , 2018, at           a.m. (Beijing time) at B-6F, Shimao Tower, 92A Jianguo Road, Chaoyang District, Beijing, the PRC.

Proposals to be Considered at the Extraordinary General Meeting

        At the meeting, you will be asked to consider and vote upon:

        THAT the agreement and plan of merger, dated as of March 26, 2018 and as amended on May 29, 2018 (the "merger agreement") (such merger agreement being in the form attached as Annex A to the accompanying proxy statement and to be produced and made available for inspection at the extraordinary general meeting), the plan of merger (the "plan of merger") required to be registered with the Cayman Registrar (such plan of merger being substantially in the form attached as Annex B to the accompanying proxy statement and to be produced and made available for inspection at the extraordinary general meeting) in order to give effect to the merger, and any and all transactions contemplated by the merger agreement and the plan of merger, including (i) the merger, (ii) the variation of the authorized share capital of the Company at the effective time of the merger from US$600,000 divided into (a) 58,000,000 Class A common shares of a par value of US$0.01 each, and (b) 2,000,000 Class C common shares of a par value of US$0.01 each to US$50,000 divided into 50,000 of US$1.00 each (the "variation of capital"), and (iii) upon the merger becoming effective, the amendment and restatement of the memorandum and articles of association of the Company (as the surviving company) in the form attached to the plan of merger (the "amendment of the M&A"), be authorized and approved;

        THAT each director and officer of the Company be authorized to do all things necessary to give effect to the merger agreement, the plan of merger and the transactions contemplated by the merger agreement and the plan of merger, including the merger, the variation of capital and the amendment of the M&A; and

        THAT the extraordinary general meeting be adjourned in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting.

        At the effective time of the merger, all Shares will be cancelled and cease to exist. If the merger is completed, each Share issued and outstanding immediately prior to the effective time of the merger, other than the Excluded Shares and the Dissenting Shares, will be cancelled and cease to exist in exchange for the right to receive US$41.20 in cash per Share without interest and net of any applicable withholding taxes; each Excluded Share will be cancelled and cease to exist for no consideration; and each Dissenting Share will be cancelled and cease to exist and each holder thereof will be entitled to receive only payment of the fair value of such Dissenting Share determined in accordance with the Cayman Islands Companies Law. Each ADS issued and outstanding immediately prior to the effective time of the merger (other than ADSs representing the Rollover Shares) will be cancelled in exchange for the right to receive US$20.60 in cash per ADS without interest and net of any applicable withholding taxes.

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        In addition, at or immediately prior to the effective time of the merger, the Company will terminate the Share Incentive Plans, terminate all relevant award agreements applicable to the Share Incentive Plans, cancel all Company Options under the Share Incentive Plans that are then outstanding and unexercised, whether or not vested or exercisable. As soon as practicable following the effective time of the merger, each holder of such cancelled Company Options will have the right to receive an amount in cash equal to the excess (if any) of US$41.20 over the applicable per share exercise price of such Company Options multiplied by the number of Shares underlying such Company Options, except that Company Options to purchase 500,000 Class A Shares held by Mr. Zhang and Company Options to purchase 250,000 Class A Shares held by Ms. Feiyan Huang will be cancelled for no consideration.

The Board's Recommendation

        The Board, acting upon the unanimous recommendation of the Special Committee:

Record Date; Shares and ADSs Entitled to Vote

        You are entitled to attend and vote at the extraordinary general meeting if you have Shares registered in your name at the close of business in the Cayman Islands on the Share record date. If you own Shares at the close of business in the Cayman Islands on the Share record date, the deadline for you to lodge your proxy card and vote is         at         a.m. (        time).

        If you own ADSs as of the close of business in New York City on the ADS record date (and do not cancel such ADSs and become a registered holder of the Shares underlying such ADSs, as explained below), you cannot vote directly nor are you able to attend the extraordinary general meeting, but you may instruct the ADS depositary (as the holder of the Shares underlying your ADSs) on how to vote the Shares underlying your ADSs. The ADS depositary must receive your instructions no later than        (New York City time) on        in order to ensure the Shares underlying your ADSs are properly voted at the extraordinary general meeting.

Quorum

        A quorum of the Company's shareholders is necessary to have a valid shareholders' meeting. The required quorum for the transaction of business at the extraordinary general meeting is the presence, in person or by proxy, of one or more shareholders entitled to vote that represent not less than one third of the voting rights represented by the issued Shares. In the event that a quorum is not present at the extraordinary general meeting, we currently expect that we will adjourn the extraordinary general meeting to solicit additional proxies in favor of the authorization and approval of the merger agreement.

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Vote Required

        Under the Cayman Islands Companies Law and the merger agreement, in order for the merger to be completed, the merger agreement and the plan of merger must be approved by a special resolution (as defined in the Cayman Islands Companies Law) of the Company's shareholders, which requires the affirmative vote of shareholders holding two-thirds or more of the voting power represented by the Shares (including Shares represented by ADSs) present and voting in person or by proxy as a single class at the extraordinary general meeting. If this vote is not obtained, the merger will not be completed.

        As of June 15, 2018, there are 34,471,813 common shares issued and outstanding, all of which are entitled to vote on the proposals at the extraordinary general meeting, subject to the procedures described below under "—Procedures for Voting." We expect that, as of the Share record date, there will be        common shares issued and outstanding, all of which will be entitled to vote on the proposals at the extraordinary general meeting, subject to the procedures described below under "—Procedures for Voting." Based on the number of Shares expected to be issued and outstanding and entitled to vote as of the close of business in the Cayman Islands on the Share record date,        votes must be cast in favor of the proposal to authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, in order for the proposal to be authorized, approved and adopted, assuming all shareholders will be present and voting in person or by proxy at the extraordinary general meeting. If less than all issued and outstanding Shares are present in person or by proxy and voting at the meeting, a smaller number of Shares will be required to approve the merger.

        As of the date of this proxy statement, the Rollover Shareholders beneficially own an aggregate of 8,527,846 Class A Shares and 805,100 Class C Shares, representing in aggregate approximately 26.6% of the Company's issued and outstanding Shares and 20,604,346 votes, and approximately 44.4% of the total number of votes represented by the Company's issued and outstanding Shares. See "Security Ownership of Certain Beneficial Owners and Management of the Company" beginning on page 147 for additional information. These Shares will be voted in favor of the authorization and approval of the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, at the extraordinary general meeting.

Procedures for Voting

        Only shareholders entered in the register of members of the Company at the close of business in the Cayman Islands on the Share record date will receive the final proxy statement and proxy card directly from the Company. Shareholders registered in the register of members of the Company as of the Share record date or their proxy holders are entitled to vote and may participate in the extraordinary general meeting or any adjournment thereof. Shareholders who have acquired Shares after the close of business on the Share record date may not attend the extraordinary general meeting unless they receive a proxy from the person or entity who had sold them the Shares.

        Shareholders wanting to vote by proxy should simply indicate on their proxy card how they want to vote, sign and date the proxy card, and mail the proxy card in the return envelope as soon as possible but in any event so that it is received by the Company no later than         a.m. on        (        time), the deadline to lodge the proxy card. Shareholders can also attend the extraordinary general meeting and vote in person.

        Shareholders who have questions or requests for assistance in completing and submitting proxy cards or need additional copies of this proxy statement or the accompanying proxy card should contact                    .

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        Holders of ADSs as of the close of business in New York City on the ADS record date will receive the final proxy statement and ADS voting instruction card either directly from the ADS depositary (in the case of registered holders of ADSs) or these materials will be forwarded to them by a third party service provider (in the case of beneficial owners of ADSs who are not registered holders of ADSs). Holders of ADSs as of the close of business on        (New York City time) (who do not cancel such ADSs and become a registered holder of the Shares underlying such ADSs, as explained in the following paragraph) cannot attend or vote at the extraordinary general meeting directly, but may instruct the ADS depositary how to vote the Shares underlying the ADSs by completing and signing an ADS voting instruction card provided by the ADS depositary and returning it in accordance with the instructions printed on the card. The ADS depositary must receive the ADS voting instruction card no later than        (New York City time) on        . The ADS depositary will endeavor, in so far as practicable, to vote or cause to be voted the Shares represented by ADSs in accordance with your voting instructions. If the ADS depositary timely receives voting instructions from an ADS holder which fail to specify the manner in which the ADS depositary is to vote the Shares represented by the holder's ADS, the ADS depositary has advised the Company that it will not vote or attempt to exercise the right to vote any Shares underlying such holder's ADSs. If you hold your ADSs in a brokerage, bank or other nominee account, you must follow the procedures of the broker, bank or other nominee through which you hold your ADSs if you wish to vote.

        Furthermore, if holders of ADSs do not timely deliver specific voting instructions to the ADS depositary, they will, under the terms of the Deposit Agreement, be deemed to have instructed the ADS depositary to give a discretionary proxy to the Designee, unless the Company notifies the ADS depositary that it does not wish such proxy to be given, that substantial opposition exists to the matters to be voted on at the extraordinary general meeting or that such matters would have a material adverse impact on the holders of Shares. Likewise, unless the Company notifies the ADS depositary that it does not wish such proxy to be given, that there exists substantial opposition to the matters to be voted on at the extraordinary general meeting or that such matters would have a material adverse impact on the holders of Shares, the Designee will receive a discretionary proxy from the ADS depositary and will vote all Shares underlying such uninstructed ADSs FOR the proposal to authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, and, upon the merger becoming effective, the variation of capital and the amendment of the M&A, FOR the proposal to authorize each director and officer of the Company to do all things necessary to give effect to merger agreement, the plan of merger, and the transactions contemplated by the merger agreement, including the merger, and FOR the proposal to adjourn the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting, unless you appoint a person other than the chairman of the meeting as your proxy, in which case the Shares represented by your proxy card will be voted (or not submitted for voting) as your proxy determines.

        Holders of ADSs will not be able to attend the extraordinary general meeting unless they cancel their ADSs and become registered in the Company's register of members as the holders of Shares prior to the close of business in the Cayman Islands on        , 2018, the Share record date. ADS holders who wish to cancel their ADSs need to make arrangements to deliver the ADSs to the ADS depositary for cancellation before the close of business in New York City on        , 2018 together with (a) delivery instructions for the corresponding Shares (name and address of the person who will be the registered holder of the Shares), (b) payment of the ADS cancellation fees ($0.05 per ADS to be cancelled pursuant to the terms of the Deposit Agreement), and any applicable taxes, and (c) a certification that the ADS holder either (i) held the ADSs as of the applicable ADS record date for the extraordinary general meeting and has not given, and will not give, voting instructions to the ADS depositary as to

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the ADSs being cancelled, or has given voting instructions to the ADS depositary as to the ADSs being cancelled but undertakes not to vote the corresponding Shares at the extraordinary general meeting, or (ii) did not hold the ADSs as of the applicable ADS record date for the extraordinary general meeting and undertakes not to vote the corresponding Shares at the extraordinary general meeting. If you hold your ADSs in a brokerage, bank or nominee account, please contact your broker, bank or nominee to find out what actions you need to take to instruct the broker, bank or nominee to cancel the ADSs on your behalf. Upon cancellation of the ADSs, the ADS depositary will arrange for JPMorgan Chase Bank, N.A., Hong Kong Branch, the custodian holding the Shares, to return the Shares to the Company's share registrar to transfer registration of the Shares to the former ADS holder (or a person designated by the former ADS holder). If after the registration of Shares in your name you wish to receive a certificate evidencing the Shares registered in your name, you will need to request the Cayman Registrar, to issue and mail a certificate to your attention. If the merger is not completed, the Company would continue to be a public company in the U.S. and the ADSs would continue to be listed on NASDAQ. The Company's Shares are not listed and cannot be traded on any stock exchange other than NASDAQ, and in such case only in the form of ADSs. As a result, if you have cancelled your ADSs to attend the extraordinary general meeting and the merger is not completed and you wish to be able to sell your Shares on a stock exchange, you would need to deposit your Shares into the Company's ADS program for the issuance of the corresponding number of ADSs, subject to the terms and conditions of applicable law and the Deposit Agreement, including, among other things, payment of relevant fees of the ADS depositary for the issuance of ADSs ($0.05 per ADS issued) and any applicable stock transfer taxes (if any) and related charges pursuant to the Deposit Agreement.

        Persons holding ADSs in a brokerage, bank or other nominee account should consult with their broker, bank or other nominee to obtain directions on how to provide such broker, bank or other nominee with instructions on how to vote their ADSs.

Proxy Holders for Registered Shareholders

        Shareholders registered in the register of members of the Company as of the Share record date who are unable to participate in the extraordinary general meeting may appoint as a representative another shareholder, a third party or the Company as proxy holder by completing and returning the form of proxy in accordance with the instructions printed thereon. With regard to the items listed on the agenda and without any explicit instructions to the contrary, the Company as proxy holder will vote in favor of the resolutions proposed at the extraordinary general meeting according to the recommendation of the Board. If new proposals (other than those on the agenda) are put forth before the extraordinary general meeting, the Company as proxy holder will vote in accordance with the position of the Board.

Voting of Proxies and Failure to Vote

        All Shares represented by valid proxies will be voted at the extraordinary general meeting in the manner specified by the holder. If a shareholder returns a properly signed proxy card but does not indicate how the shareholder wants to vote, Shares represented by that proxy card will be voted FOR the proposal to authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger and, upon the merger becoming effective, the variation of capital and the amendment of the M&A, FOR the proposal to authorize each director and officer of the Company to do all things necessary to give effect to the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, and FOR the proposal to adjourn the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions proposed at the extraordinary general meeting, unless the shareholder appoints a person other than the chairman of the meeting as proxy, in

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which case the Shares represented by that proxy card will be voted (or not submitted for voting) as the proxy determines. If a shareholder fails to vote by proxy or in person, it will be more difficult for the Company to obtain the necessary quorum to transact business at the extraordinary general meeting and to obtain the required votes described in "Vote Required."

        Brokers, banks or other nominees who hold Shares in "street name" for customers who are the beneficial owners of such Shares may not give a proxy to vote those customers' Shares in the absence of specific instructions from those customers. If proxies are properly dated, executed and returned by holders of Shares and no specific instructions are given by such holders, such Shares will be voted "FOR" the proposals and in the proxy holder's discretion as to other matters that may properly come before the extraordinary general meeting. Abstentions by holders of Shares are included in the determination of the number of Shares present and voting but are not counted as votes for or against a proposal. If no proxy is given by such holders of Shares, broker non-votes will be counted toward a quorum but will not be treated as voted on any proposals at the extraordinary general meeting.

        Holders of ADSs as of the close of business on        (New York City time) (who do not cancel such ADSs and become a registered holder of the Shares underlying such ADSs, as explained in the following paragraph) cannot attend or vote at the extraordinary general meeting directly, but may instruct the ADS depositary how to vote the Shares underlying the ADSs by completing and signing an ADS voting instruction card provided by the ADS depositary and returning it in accordance with the instructions printed on the card. The ADS depositary must receive the ADS voting instruction card no later than        (New York City time) on        . The ADS depositary will endeavor to vote or cause to be voted the Shares represented by ADSs in accordance with the ADS holder's voting instructions. The ADS depositary will not itself exercise any voting discretion in respect of any Shares represented by ADSs other than in accordance with signed voting instructions from the relevant ADS holder. Accordingly, Shares represented by ADSs, for which voting instructions fail to specify the manner in which the ADS depositary is to vote or no timely voting instructions are received by the ADS depositary, will not be voted.

        Brokers, banks and other nominees who hold ADSs in "street name" for their customers do not have discretionary authority to provide the ADS depositary with voting instructions on how to vote the Shares underlying the ADSs with respect to the authorization and approval of the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger. Accordingly, if banks, brokers or other nominees do not receive specific voting instructions from the beneficial owner of ADSs, they may not provide the ADS depositary with voting instructions on how to vote the Shares underlying the ADSs with respect to the authorization and approval of the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger.

Revocability of Proxies

        Registered holders of our Shares may revoke their proxies in one of three ways:

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        Holders of ADSs may revoke their voting instructions by notification to the ADS depositary in writing at any time prior to 12:00 p.m. (New York City time) on           , 2018. A holder of ADSs can do this by completing, dating and submitting a new ADS voting instruction card to the ADS depositary bearing a later date than the ADS voting instruction card sought to be revoked.

        If you hold your ADSs through a broker, bank or other nominee and you have instructed your broker, bank or other nominee to give ADS voting instructions to the ADS depositary, you must follow the directions of your broker, bank or other nominee to change those instructions.

Rights of Shareholders Who Object to the Merger

        Shareholders who dissent from the merger will have the right to receive payment of the fair value of their Shares in accordance with Section 238 of the Cayman Islands Companies Law if the merger is consummated, but only if they deliver to the Company, before the vote to authorize and approve the merger is taken at the extraordinary general meeting, a written objection to the merger and subsequently comply with all procedures and requirements of Section 238 of the Cayman Islands Companies Law for the exercise of dissenters' rights, a copy of which is attached as Annex D to this proxy statement. The fair value of each of their Shares as determined under the Cayman Islands Companies Law could be more than, the same as, or less than the per share merger consideration they would receive pursuant to the merger agreement if they do not exercise dissenters' rights with respect to their Shares.

        ADS HOLDERS WILL NOT HAVE THE RIGHT TO EXERCISE DISSENTERS' RIGHTS AND RECEIVE PAYMENT OF THE FAIR VALUE OF THE SHARES UNDERLYING THEIR ADSs. THE ADS DEPOSITARY WILL NOT ATTEMPT TO EXERCISE ANY DISSENTERS' RIGHTS WITH RESPECT TO ANY OF THE SHARES THAT IT HOLDS, EVEN IF AN ADS HOLDER REQUESTS THE ADS DEPOSITARY TO DO SO. ADS HOLDERS WISHING TO EXERCISE DISSENTERS' RIGHTS MUST, BEFORE          (NEW YORK CITY TIME) ON          , 2018, SURRENDER THEIR ADSs TO THE ADS DEPOSITARY FOR CONVERSION INTO SHARES, PAY THE ADS DEPOSITARY'S FEES REQUIRED FOR THE CANCELLATION THEIR ADSS, AND PROVIDE INSTRUCTIONS FOR THE REGISTRATION OF THE CORRESPONDING SHARES IN THE COMPANY'S REGISTER OF MEMBERS, AND CERTIFY THAT THEY HOLD THE ADSs AS OF THE RECORD DATE AND HAVE NOT GIVEN, AND WILL NOT GIVE, VOTING INSTRUCTIONS AS TO THEIR ADSs, AND BECOME REGISTERED HOLDERS OF SHARES BY THE CLOSE OF BUSINESS IN THE CAYMAN ISLANDS ON THE SHARE RECORD DATE. THEREAFTER, SUCH FORMER ADS HOLDERS MUST COMPLY WITH THE PROCEDURES AND REQUIREMENTS FOR EXERCISING DISSENTERS' RIGHTS WITH RESPECT TO THEIR SHARES UNDER SECTION 238 OF THE CAYMAN ISLANDS COMPANIES LAW. IF THE MERGER IS NOT COMPLETED, THE COMPANY WOULD CONTINUE TO BE A PUBLIC COMPANY IN THE UNITED STATES AND ADSs WOULD CONTINUE TO BE LISTED ON NASDAQ. SHARES ARE NOT LISTED AND CANNOT BE TRADED ON ANY STOCK EXCHANGE OTHER THAN NASDAQ, AND IN SUCH CASE ONLY IN THE FORM OF ADSs. AS A RESULT, IF A FORMER ADS HOLDER HAS CONVERTED HIS, HER OR ITS ADSs TO EXERCISE DISSENTERS' RIGHTS AND THE MERGER IS NOT COMPLETED AND SUCH FORMER ADS HOLDER WISHES TO BE ABLE TO SELL HIS, HER OR ITS SHARES ON A STOCK EXCHANGE, SUCH FORMER ADS HOLDER WOULD NEED TO DEPOSIT HIS, HER OR ITS SHARES INTO THE COMPANY'S ADS PROGRAM FOR THE ISSUANCE OF THE CORRESPONDING NUMBER OF ADSs, SUBJECT TO THE TERMS AND CONDITIONS OF APPLICABLE LAW AND THE DEPOSIT

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AGREEMENT, INCLUDING, AMONG OTHER THINGS, PAYMENT OF RELEVANT FEES OF THE ADS DEPOSITARY FOR THE ISSUANCE OF ADSs ($0.05 FOR EACH ADS (OR PORTION THEREOF) ISSUED) AND APPLICABLE SHARE TRANSFER TAXES (IF ANY) AND RELATED CHARGES PURSUANT TO THE DEPOSIT AGREEMENT.

Whom to Call for Assistance

        If you need assistance, including help in changing or revoking your proxy, please contact                    .

Solicitation of Proxies

        We have engaged            to assist in the provision of proxy solicitation information to brokerage, banks or other nominees and individual investors for the extraordinary general meeting. We expect that fees for services provided by            will be approximately US$            plus certain costs associated with telephone solicitations, if required, and reimbursement of out-of-pocket expenses. In addition, proxies may be solicited by mail, in person, by telephone, by internet or by facsimile by certain of the Company's officers, directors and employees. These persons will receive no additional compensation for solicitation of proxies but may be reimbursed for reasonable out-of-pocket expenses. We will reimburse banks, brokers, nominees, custodians and fiduciaries for their reasonable expenses in forwarding copies of this proxy statement to the beneficial owners of Shares and in obtaining voting instructions from those owners. We will pay all expenses of filing, printing and mailing this proxy statement.

Other Business

        We are not currently aware of any business to be acted upon at the extraordinary general meeting other than the matters discussed in this proxy statement.

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